According to the AARP Public Policy Institute, 24% of persons aged 65 and up live in families that rely on Social Security benefits for 90% or more of their income.
With an average monthly payout of $1,523, retirees who rely on Social Security to cover all of their living expenditures are living on a shoestring.
Seniors can take advantage of a variety of discounts and bonuses once they retire, allowing them to live a rich life on a limited budget. Take the necessary steps to stretch your benefits as far as possible while maintaining a comfortable lifestyle.
1. Be patient. Taking Full Advantage of Your Social Security Benefits
Retirement from work and the start of Social Security benefits are two reasons to rejoice as you get older. Although you can begin collecting Social Security at the age of 62, your monthly payments will be much higher if you wait until you reach full retirement age, which ranges from 65 to 67 years old depending on your birth year.
For example, if you reach full retirement age at 67 but begin receiving Social Security at the age of 62, your benefits will be 30% lower than if you wait another five years.
If at all feasible, defer collecting until you’ve reached full retirement age. If you wait until you’re 70 to start collecting Social Security, you’ll get the maximum amount of benefits.
2. If you filed for Social Security benefits early, think about withdrawing your claim.
Have you already claimed your benefits and are now surprised by the true costs of retiring on Social Security? If you filed for Social Security within the last 12 months and want to raise your benefits, you can withdraw your claim and reapply at a later date.
It’s worth noting, too, that if you choose to withdraw, you’ll have to refund all of the advantages you’ve gotten up to that time. Still, being able to maximize your Social Security payouts may be worth it in the long run.
3. Make a Social Security Survivor Benefits Plan
If you’re married, talk about ways to maximize your Social Security payments if one of you passes away. When one individual dies, the widow or widower may be eligible to receive the deceased spouse’s benefits instead of their own if the benefits are higher.
As a result, it makes sense for the higher-earning spouse to retire later so that when the household’s two Social Security checks become one, the surviving spouse receives the maximum benefits available.
4. Relocate to a Low-Cost-Of-Living Area
When your cost of living is lower, your Social Security benefits will stretch further. If you live in a high-cost area, consider relocating to a place where you can survive solely on your social security check.
Warm weather and enough to do for retirees may be found in cities like Tuscon, Arizona, and Reno, Nevada, which also have a low cost of living.
5. Pay Your Debts Before You Retire
It’s advisable to pay off all debts, including credit card payments and mortgages, before retiring to get the most of your Social Security benefits. This way, rather than spending your benefits on items you’ve already purchased, you can focus on what you need on a daily basis.
6. Relocate to a State That Is Tax-Friendly
Most states and Washington, D.C. do not tax Social Security benefits, but if you live in a state with even lower taxes, you can stretch your benefits even further.
According to AARP, Alaska and New Hampshire have no sales or income taxes, whereas Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming have sales taxes but no state income taxes or taxes on pension income.
7. Enlist the Help of a Roommate
Sharing living expenses with a roommate or housemate is a terrific way to stretch your money further, and it can also help you avoid the loneliness that comes with retirement.
According to a SmartAsset survey, renters who split a two-bedroom with a roommate save more than $800 per month compared to those who rent a one-bedroom on their own in several big cities.
Even if you don’t rent, sharing a room with a roommate can help you save money on utilities, internet, TV, and energy.
8. Make Free Entertainment a Priority
You don’t have to spend any of your Social Security benefits to keep yourself occupied and entertained. Stay entertained during the day by visiting a free museum or borrowing a book from the library.
You can also go to an open mic night at a local coffee shop or theatre, where admission is usually free. Attending book readings, attending a lecture at a local college or university, and attending free outdoor concerts are all free activities.
These gains, however, may have to wait until states have fully recovered from the coronavirus shutdowns.
9. Become a member of the American Association of Retired Persons (AARP).
An AARP membership costs $16 per year, however, the discounts can more than cover the cost of the membership. AARP members save money on health and wellness, restaurants, entertainment, shopping, and community memberships, in addition to receiving typical senior discounts.
10. Consider Relocating to a Retirement Community
If you’re thinking about relocating, a retirement community can be a better option than buying a new house in the area. “They’re generally less expensive than the nearby properties on the market that are open to the public,” said Sara Zeff Geber, a retirement coach.
Furthermore, living in a retirement community makes it easy to interact with others your age. However, you should be realistic about what you can afford with your Social Security check, as some luxury retirement communities can be rather costly.
11. Seek out restaurants that provide discounts to senior citizens.
You’ll be on a limited budget if you live on Social Security, but it’s fine to eat out once in a while – especially if you go to a restaurant that gives a senior discount.
Many popular restaurants offer seniors 55 and older up to a 25% discount on meals, including takeout. According to TheSeniorList.com, Chili’s offers a 10% senior discount every day, and Uno Pizzeria & Grill offers a 25% discount for seniors on Wednesdays.
12. Save Money While Shopping
Keeping your clothes in good shape doesn’t have to eat up a large portion of your Social Security payment. According to TheSeniorList.com, many large retailers provide discounts to senior customers:
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the Banana Republic gives 10% off to buyers age 50 and up every Tuesday, Kohl’s gives shoppers 60 and up 15% off every Wednesday, and Ross has a 10% off Tuesday promotion for anyone age 55 and up.
13. Don’t Pay Too Much for Your Prescriptions
The cost of medication can quickly pile up. When possible, get the generic version of your medication to save money. Also, to save money and gain benefits, consider joining a prescription membership program at the pharmacy where you buy your medication.
The Rite Aid Rx Savings Program, for example, saves members 15% or more on prescription drugs, and a 30-day supply of common generics costs only $9.99 with the plan.
14. Take a Walk Outside
Going for a daily walk or hike is a simple and inexpensive method to stay active. Make a morning walk in your neighborhood a part of your regular habit, or go hiking on a nearby trail to take in the scenery.
Hiking during the day when most people are at work eliminates the stress of dealing with crowds, allowing you to fully appreciate the peace and quiet of the outdoors.
15. Become a volunteer
Giving back to those in need is one of the best ways to feel good. Volunteer for a cause that matters to you – it’s a costless way to spend your time that also benefits others.
16. Return to School
Tuition waivers for citizens aged 60 and over are available at many local colleges and institutions, allowing seniors to take college classes for free.
You might be able to audit classes for free even if your local higher education school does not provide a tuition waiver. This implies that you are welcome to attend all classes and lectures, but you will not gain credit for them.
One advantage of auditing is that you won’t have to worry about tests or homework.
17. Sign up for a New Gym Class (for Free)
You may not have had time to go to the gym on a regular basis while working, but that is no longer an excuse. SilverSneakers is a free service that allows Medicare members access to over 14,000 gyms and fitness centers across the US.
SilverSneakers members not only have full access to participating gyms, but they also get free classes in the gym and elsewhere. If you’ve never tried yoga before or want to dance your way to better health, you may do it for free.
Regrettably, this incentive may have to wait until all gyms are completely operational and safe to visit.