If you’re newly retired and have started to receive your Social Security benefits, congratulations! You’ve earned them. Now the question then becomes: how to afford to live off social security benefits. It can be difficult, but it is possible. Here are some tips that can help you stretch your income.
How to Afford to Live Off Social Security Benefits
Depending on where in the country you live, making ends meet once you hit retirement age can be difficult.
These tips will help you find ways to make it a bit easier, so you can live without the stress of not being able to pay your bills or have money for medication.
Some of them might seem a little drastic, but drastic times call for drastic measures.
1. Rent Out a Room
By renting out a room in your home to someone who can afford to pay rent, you’ll put yourself in a better position financially.
By taking on this additional resident, you’ll be covering the majority of your living expenses.
You could potentially make $400 or more per month from this arrangement.
For example, my house, while technically not a duplex, is kind of one.
There are two sides that have everything you need to live – bedroom bathroom, kitchen, living room.
All I’d need to do is put a sturdy door in where the two sides connect, and I could rent out half of the house.
Or if I really wanted to, I could rent out both sides.
It’s something I might do when the time comes.
It could add a lot of money to my income and then I could move to Florida.
2. Delay Taking Your Retirement Benefits
Delay taking Social Security until full benefits begin at age 66.
By waiting, you’ll receive up to 32% more in benefits over the course of your lifetime.
Depending on your age, you might have to wait until you reach 67 and a half before you can receive your full benefits.
It might make sense to do so. You’ll have more money to live on once you do retire.
3. Reduce Your Monthly Expenses
Now is the time to start reducing your monthly expenses.
Don’t wait until you retire.
Cut out anything you don’t need.
Stop spending money when you don’t need to such as eating out.
The money you save now can be used for your retirement savings.
Also, the lower your expenses are, the less you can live on later.
4. Look into Reverse Mortgages
You see them advertised on TV all the time.
They aren’t right for everyone, but if you own your home or have a lot of equity in your home then one might make sense for you.
It will also give you additional income to live on once you are retired.
5. Keep Working
If you’re ready to retire or have health issues, then this might not be for you.
However, if you are in good health consider working part-time.
It will give you something to do, keep you active and provide you extra income.
6. Move to a Smaller Home
It might be a good idea to sell your house altogether and move into a smaller one.
A smaller home or apartment will cost you less to maintain.
Your utilities will be less as well.
As you age, you may not be able to take care of a large yard.
And let’s face it. If you own a home you know there is something that always needs to be repaired.
7. Get Creative With Your Spending
Use coupons for groceries or other necessities, and buy in bulk if possible to save even more money.
Make a budget and stick to it.
Trim the fat – in your budget.
8. Move Somewhere Less Expensive
If you’re able to, pick a place to live that’s less expensive in your retirement such as Florida or Arizona.
Avoid places like New York City, Chicago, and Los Angeles because the cost of living is much higher.
Retirees on limited incomes should choose housing that is affordable and close to health care services as well.
9. Buy Generic When You Can
Ask your doctor if there is a replacement for your medications that are less expensive.
You’ll also want to find out if you qualify for any programs that reduce the cost of your medicine.
10. Get Rid of Your Car
If you live in an area that has good public transportation then consider getting rid of your car.
There may come a time you can no longer drive it.
Not having a car can save you thousands of dollars a year.
11. Contact the Social Security Administration
Contact the Social Security Administration to make sure you are receiving all the benefits you qualify for.
They do have programs that will allow you to keep more of your social security if you meet the income requirements.
12. Pay Off Your Debts
The more debt you can pay off before you retire the less money you will need to pay your bills.
This may sound obvious, but seriously, do whatever you can to be debt-free when you retire.
Even if you have to take a second job to get your debts paid off, you will be so happy that you did.
13. Check Out State Benefits
Not all retirement benefits come from the federal government.
States offer benefits as well.
I know that in Illinois there is a program that allows you to get your medicines for just a couple of dollars.
There are income requirements to qualify, but it is certainly worth it to jump through the hoops to get these benefits.
14. Stock Up Now
If you enjoy a hobby such as knitting or weaving or diamond air painting, stock up on supplies or kits while you are still working.
That way once you retire, you will be able to still enjoy your hobbies without having to worry about whether or not you can afford them.
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To Sum it All Up:
Living on your social security benefits isn’t easy. You might have to make some hard choices such as taking in a roommate or downsizing to a smaller living space, but it will be worth it in the end.