According to the AARP Public Policy Institute, 24% of those aged 65 and over live in families that rely on Social Security benefits for 90% or more of their income. With an average monthly benefit of $1,523, retirees who rely entirely on Social Security to cover their living expenses are operating on a shoestring budget.
Seniors can take advantage of numerous discounts and perks once they retire, allowing them to live a luxurious life on a limited budget. Take the necessary steps to maximise your benefits and live comfortably.
1. Defer Receiving Social Security Benefits
Two reasons to celebrate growing older are retiring from work and beginning to collect Social Security. While you can begin collecting Social Security benefits at age 62, your monthly benefits will be significantly higher if you wait until you reach full retirement age, which ranges from 65 to 67 depending on your birth year.
For instance, if your full retirement age is 67 and you begin collecting Social Security benefits at age 62, your benefits will be 30% less than they would be if you waited the additional five years. If possible, defer collecting until you reach full retirement age. If you wait until age 70 to begin collecting Social Security, you will receive the maximum benefit amount.
2. Consider Withdrawing Your Claim If You Have Already Filed For Social Security Early
Have you filed for benefits early and are now surprised by the true cost of retirement on Social Security? If you applied for Social Security within the last 12 months and wish to increase your benefits, you can withdraw your claim and reapply at a later date. It is critical to note, however, that if you choose to withdraw, you will be required to repay all benefits received up to that point. Nonetheless, this may be worth it in the long run if it allows you to maximise your Social Security payments.
3. Plan Ahead for Survivor Benefits from Social Security
If you are married, it is critical to discuss strategies for maximising Social Security benefits in the event of one spouse’s death. When one person dies, the widow or widower may elect to receive the deceased spouse’s benefits instead of their own if the deceased spouse’s benefits are greater than their own. Thus, it makes sense for the higher-earning spouse to retire later so that when the household receives only one Social Security check, the surviving spouse receives the maximum benefits possible.
4. Relocate to a Low-Cost-of-Living Area
When your cost of living is lower, your Social Security benefits will last longer. If you live in an expensive area, consider relocating to one where you can subsist solely on your social security check. Cities like Tucson, Arizona and Reno, Nevada offer retirees warm weather and plenty to do, as well as a low cost of living.
5. Prior to Retiring, Pay Off Debt
To maximise your Social Security benefits, it’s best to pay off all debts prior to retirement, including credit card bills and mortgages. This way, you can direct your benefits toward daily necessities rather than past purchases.
6. Relocate to a State That Is Tax-Friendly
While the majority of states and the District of Columbia do not tax Social Security benefits, you can stretch your benefits even further if you live in a state with even lower taxes. According to AARP, Alaska and New Hampshire do not tax sales or income, while Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming do tax sales but not income or pension income.
7. Acquire a Roommate
Sharing living expenses with a roommate or housemate is an excellent way to stretch your dollars and avoid the loneliness that often comes with retirement. According to a SmartAsset study, renters who split a two-bedroom apartment with a roommate save more than $800 per month compared to those who rent a one-bedroom apartment alone. Even if you do not rent, sharing a room with another person can help you save money on utilities, internet, cable, and energy.
8. Profit from Free Entertainment
You do not have to spend any of your Social Security benefits to keep yourself occupied and entertained. Visit a museum that offers free admission or borrow a book from the library to keep yourself entertained throughout the day. Additionally, you can attend open mic nights at a nearby coffee shop or theatre, which frequently charge no admission. Additionally, attending book readings, attending a lecture at a local college or university, and attending free outdoor concerts are all free activities.
Naturally, these benefits may have to wait until states have fully recovered from coronavirus-related shutdowns.
9. Consider Purchasing an AARP Membership
A membership in AARP costs $16 per year, but the discounts can cover the membership fee and more. AARP members receive additional savings on health and wellness expenses, restaurants, entertainment, shopping, and community memberships.
10. Consider Relocating to a Retirement Community
If you’re considering relocating, a retirement community may be less expensive than purchasing a new home in the area. “They’re frequently less expensive than the surrounding open-market homes,” retirement coach Sara Zeff Geber explained. Additionally, living in a retirement community facilitates social interaction with others your age. However, you must be realistic about the amount of money you can afford with your Social Security check, as some luxury retirement communities can be quite costly.
11. Visit Restaurants That Provide Discounts for Seniors
While living on Social Security will put you on a tight budget, it’s acceptable to treat yourself every now and then – especially if you visit a restaurant that offers a senior discount. Numerous popular chains offer seniors 55 and older discounts of up to 25% on meals, including takeout. According to TheSeniorList.com, Chili’s offers a 10% senior discount every day and Uno Pizzeria & Grill offers a 25% senior discount on Wednesdays.
12. Conserve While You Are Shopping
Investing in a new wardrobe does not have to consume a sizable portion of your Social Security check. Numerous major retailers offer senior shoppers discounts: Banana Republic offers 10% off to shoppers aged 50 and over, Kohl’s offers 15% off to shoppers aged 60 and over every Wednesday, and Ross offers a 10% off Tuesday deal to anyone aged 55 and over, according to TheSeniorList.com.
13. Avoid Excessive Prescription Costs
Costs associated with medication can quickly accumulate. Always choose the generic version of your prescriptions when possible to save money. Additionally, consider enrolling in a prescription membership programme at the pharmacy where you purchase your medication in order to receive discounts and earn rewards. For instance, the Rite Aid Rx Savings Program offers members a 15% discount or more on prescription medications, and a 30-day supply of the majority of generics costs only $9.99 with the plan.
14. Make Your Way Outside
A simple and inexpensive way to stay active is to go for a daily walk or hike. Make a morning stroll around your neighbourhood a part of your daily routine, or visit a nearby hiking trail to take in the local scenery. Going on hikes during the hours when the majority of people are at work saves you the hassle of dealing with crowds, allowing you to truly appreciate the outdoors’ peace and quiet.
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 cost-free way to spend your time that also benefits others.
16. Return to School
Numerous local colleges and universities waive tuition for seniors aged 60 and older. Even if your local institution of higher education does not offer tuition assistance, you may be able to audit classes for free. This means that you may attend all classes and lectures but will not receive credit for them. One advantage of auditing is that you are not required to complete exams or homework assignments.
17. Consider a New Gym Class (for Free)
While you may not have had time to visit the gym on a consistent basis while working, there is now no excuse for inactivity. Medicare beneficiaries are eligible to join the free SilverSneakers programme, which provides seniors with access to over 14,000 gyms and fitness centres nationwide. Not only do SilverSneakers members have full access to participating gyms, but they also receive complimentary classes at the gym and elsewhere. If you’ve never tried yoga or would like to dance your way to better health, you can do so for free.
Regrettably, this benefit may have to wait until all gyms are fully operational and safe to visit once more.