Comfortable retirement in the USA: 8 tips on how to live comfortably on social security
'21.07.2021'
Nurgul Sultanova-Chetin
If you plan to live on social security after retirement, then, contrary to popular belief, this is quite feasible. Much depends on the amount of your checks and your lifestyle, writes Money Talks News.
The maximum income you can count on from Social Security in 2020 is around $ 3000 per month if you apply for benefits when you reach full retirement age (66).
But most people don't get that much. The average retirement benefit is about $ 1500 a month. If you are looking to use only social security to cover your retirement expenses, here are some tips on how you can do it.
1. Get rid of debt before retirement
What's your biggest debt? For many (if not most) of us, this is a mortgage. In some cases, it may be wiser not to pay off your mortgage ahead of time. However, retirement is usually not one of these cases. When your monthly income is fixed and low (as is the case with Social Security), mortgage costs hit your financial position hard.
2. Reduce the medical expenses you pay out of your own pocket
Medicare covers most of the medical costs for retirees. But you can still get huge bills for prescription drugs and services not covered by the program, as well as co-payments for services. Medicare members spend an average of $ 5 out of pocket per year on health care costs. Those over 801 spend even more - $ 65 a year.
How can these costs be reduced? Use these sites to find out about discounts and coupons for prescription drugs:
Other health savings strategies:
- Do a pre-procedure analysis to make sure your insurance covers all involved doctors and services.
- Talk to hospitals and clinic bookkeepers and ask for a discount on services.
- Take full advantage of the Flexible Spending Account (FSA) or Health Savings Account (HSA).
3. Stop patronizing adult children
If you do not have the resources to live in grand style on your income, it's time to let go of all adult children who are still tied to your wallet. You will need all your money, and your children still have time to earn and save.
Notify them well in advance and set an exact deadline. Explain your financial situation without apologies or excessive explanations. Tell them how confident you are of them and their ability to take care of themselves. Trust them to figure out the rest.
4. Don't rush to claim social security
Wait at least until you reach full retirement age (66). Getting retirement benefits early reduces the amount of money you will receive each month. Check out the benefits of a grace period and some reasons for claiming an immediate pension to decide which is best for you.
If your life expectancy is low or you are not dependent on money, it may make sense to apply early. But for most of us, it's best to demand social security as late as possible. Your benefits will grow by 8% per year until you apply for benefits. At the age of 70, there will be no more such increases, which means there will be no reason to postpone.
5. Explore life in regions with cheap housing
Moving to where you think it is cheaper to live is not always an option due to several factors. However, if you like the idea of a move, it might be worth considering as a way to increase the purchasing power of your limited retirement income. Whether you are moving to another US or overseas, do your research to ensure that the cost of living is lower without sacrificing quality.
For example, look at the 10 states with the lowest property taxes.
- Hawaii: Present in several = 0,28%
- Alabama: Present in several = 0,41%
- Colorado: Present in several = 0,51%
- Louisiana: Present in several = 0,55%
- Columbia region: Present in several = 0,56%
- South Carolina: Present in several = 0,57%
- Delaver: Present in several = 0,57%
- West Virginia: Present in several = 0,58%
- Nevada: Present in several = 0,60%
- Wyoming: Present in several = 0,61%
6. Sell one car
Retirement will most likely allow you to slow down. You will have to travel less, and if there are two of you, you may no longer need two cars.
Practice before making a deal by dividing one car. Try walking, cycling, or using public transportation more, if possible.
Calculate to see how profitable such a solution would be. By selling a car, you will get extra money, as well as save on registration, car insurance, gasoline, motor third party liability insurance, oil and maintenance.
Here's how much Americans spent on a car in 2019:
- Car insurance: $ 1 545
- Gas and engine oil: $ 2 094
- Buying a car: $ 4 394
7. Don't waste money on entertainment
You may be amazed to find out how much free entertainment is around. You can cut your cable TV costs and watch free entertainment; stop paying for music and audiobooks. Read all the books, magazines and newspapers you want in the library or through library databases on the internet.
Here are some completely free sources of entertainment:
- Free download audiobooks;
- Free access to e-books;
- Watch movies and TV shows is free;
- Free training online at Ivy League universities;
- Colleges and universities where seniors study for free.
8. Get healthier and slimmer and don't pay for it
Give up expensive gym membership and don't regret it, there are tons of alternatives:
- application Healthywage
- Classpass - mix yoga, group fitness classes in different studios.
Many Medicare plans include access to the popular fitness program Silver Sneakers... Membership is free for persons aged 65 and over (check eligibility here). The program covers free gym membership and includes streaming, on-demand and scheduled group sessions of cardiovascular fitness, balance, flexibility, strength yoga, and weighted fitness.
If your plan does not include a membership, consider replacing your Medicare plan to the one that includes it.
