It’s not uncommon for seniors to rely solely on their Social Security benefits after they retire. Unfortunately, according to the AARP, the average monthly benefit for retirees is $1,541. No matter where you live, it can be tough to make that amount cover all your expenses!
However, by being smart, thrifty and a little bit creative, you can stretch your benefits to pay for all necessities and maybe even have a little extra left to spend on yourself! Here are 10 money-saving tips to help you live comfortably off your social security check.
1. Delay taking your benefits
While you can start collecting Social Security benefits as soon as you turn 62, it’s not always smart if you’re planning to live solely off your monthly benefits. The amount you’ll receive each month increases the longer you wait, so if you can use other funds until you reach your full retirement age—between 65 and 67, depending on the year you were born—your monthly Social Security payment will be much higher. It’s smart to delay taking benefits as long as possible so that you can maximize your monthly benefits later.
2. Find an ideal Medicare plan
Choosing the right Medicare plan is key in keeping your healthcare expenses to a minimum during your senior years. If you haven’t looked at the terms of your coverage lately, it could be a costly mistake. You might be paying more in monthly premiums than you need to, or you might be subject to hefty out-of-pocket expenses if you get ill unexpectedly.
During your Initial Enrollment Period or the Annual Enrollment Period, consider the monthly expenses associated with different plans, including Original Medicare, Medigap and Medicare Advantage.
- Medicare Advantage: These plans may help you reduce your monthly premiums and cover common gaps in coverage with Original Medicare, such as dental, hearing and vision services.
- Medigap: If you stick with Original Medicare, a Medigap plan may help reduce the out-of-pocket expenses associated with routine and unexpected healthcare.
There are many different Medicare Advantage and Medigap plans available, so make sure you find a plan in your area that includes all the benefits you need at a price you can afford.
3. Downsize your home
One of the most effective ways for seniors to save money in retirement is by downsizing. Not only can you reduce or eliminate the expense of your mortgage by moving into a smaller home, but you can also reduce your utility bills and homeowner’s insurance premiums.
Whether they choose to invest the difference or use the extra money to pay rent at an independent living community, many seniors find that downsizing is one of the best decisions they’ve ever made. As an added bonus, downsizing reduces the amount of upkeep you need to do to keep your home in good condition. You’ll save money on routine maintenance and repairs over time.
4. Consider a reverse mortgage
There are other options if you can’t bring yourself to downsize. If you’ve built equity in your home, it’s smart to think about taking out a reverse mortgage. This is a loan that’s borrowed against the value of your home, providing you with either a lump sum, a line of credit or a fixed monthly payment, all while letting you remain in your house.
5. Get a roommate
If you have a spare room or two in your house, consider getting a roommate. Alternatively, look for a room in someone else’s house. You’ll not only save on housing and utility bills, but you’ll also have valuable companionship and less space that you have to maintain by yourself.
6. Take advantage of senior discounts
There are many places that offer senior discounts. While the savings might not be huge, they can really add up over time. Here are just a few of the places where you’ll commonly receive senior discounts:
- Restaurants: Whether it’s a discount on a cup of coffee or an entire meal, many chain restaurants, and even some independent ones, offer great deals for seniors. Applebee’s, Arby’s, Denny’s and Sonic are just a few popular spots where you can get up to 15 percent off your bill.
- Grocery stores: It might surprise you that some of the biggest grocery store chains in the country still offer senior discounts on certain days. Publix, Fry’s Food Stores and American Discount Chains give seniors up to 10 percent off their entire purchase.
- Retail stores: Many retail chains offer senior discounts on certain days of the week. Take up to 10 percent off your purchase at places like Ross Stores, Rite Aid, Goodwill and more. Kohl’s and Walgreens also offer lucrative discounts for seniors, up to 15 percent and 20 percent, respectively.
7. Take advantage of free entertainment
There are plenty of ways to enjoy your leisure time without spending a dime. If you like to read, check out a great book at your local library. It’s also a great idea to check with your local park district to see what free events they offer. Many park districts have movies in the park, free concert series and courses that allow you to explore a hobby, engage in group fitness and more.
8. Get smart about managing your debt
While no one likes to be in debt, in some cases, carrying debt is better than paying off expenses right away. Examples of this include a home loan—don’t pay it off all at once so that you’ll have more money in your pocket from month to month.
However, if you are able to eliminate your debt before retirement, this will ensure you have the most money available to use from your Social Security check.
9. Stick to a budget
When you’re living on a fixed income, developing a budget— whether it’s for the month or the whole year—helps you make the most of your Social Security income. It’s helpful for seniors to follow the CLARK method for budgeting:
- Calculate your monthly income
- List all expenses
- Analyze your spending
- Record everything
- Knock out unnecessary debt to start building your savings
Making a budget is one thing, but sticking to it might be difficult. Remember that no matter how well you plan, things happen. Make cuts when you can to account for unexpected expenses that may come up.
10. Ensure you have prescription drug coverage
One of the biggest healthcare costs for seniors is the price of prescription drugs. If you get ill, the cost of prescription drugs may take up a serious chunk of your Social Security benefits. Here are three effective ways for seniors to save money on their prescription drugs:
- Understand your insurance plan’s benefits and choose the right Medicare Part D plan that includes coverage for the drugs you need.
- Find financial assistance from pharmaceutical companies. Nearly all companies offer a Patient Assistance Program (PAP).
- Use alternative sources for savings. Take advantage of tax deductions, drug discount cards and coupons. Also research the prices at mail-order or online pharmacies—in some cases, they provide a modest savings over your usual pharmacy. Whenever possible, choose generic instead of name brand drug.
While it can be challenging to cover all your expenses on Social Security alone, it can be done. There are plenty of expenses to keep track of, from medical costs to housing and everything in between. But if you’re willing to make some sacrifices, do some research and stick to your plan, you can significantly stretch your budget and enjoy your senior years comfortably.
SeniorCare Benefits is devoted to helping seniors find the right healthcare coverage for their needs. We represent a range of Medicare plans and can help you identify the benefits and coverage that are right for you and your budget. Call us today at 1-888-230-0269 so our agents can assist you.
