According to the National Council on Aging, there are more than 25 million Americans 60 or over who are financially insecure. For the most part, American retirees are underprepared for expenses that come with retirement such as Medicare costs.
Because so many people rely on their Social Security checks for 90% of their income, many retirees in America are forced to live on a very strict budget during their senior years. The average Social Security check is about $1,400 per month.
The Motley Fool estimates that the average American retiree spends around $3,700 per month. That’s about $44,400 a year. With the average Social Security check only bringing in about $16,800 each year, the average retiree is missing about $27,600 a year during retirement.
So, how can you make up for those lost years of saving for retirement? Here are just a few ways to get by on a budget in your senior years.
Pick Up a Side Hustle
Most seniors in America retiree at anywhere from 62 to 63 years old. They usually start taking their Social Security benefits at the age in which they retire. However, they soon find out that their Social Security check isn’t enough to live the lifestyle they had always hoped for their retirement.
To earn a little extra income, pick up a side hustle. Senior side hustles can be anything you enjoy doing that has the potential to earn you some cash. Some popular senior side hustles are tutoring, freelance writing, and pet sitting.
However, you’ll want to monitor your income. In 2019, if you make more than $17,640 a year before full retirement age while you’re taking Social Security benefits, you can be penalized.
Move to a More Affordable City or State
According to CNBC, more retirees moved to Florida than any other state in 2017. However, Florida’s cost of living is above the national average and therefore, is considered an expensive state to live.
By making the decision to move to a more affordable city or state, you are opening up more room in your budget. If the lower level of cost of living, you can allow a bigger allowance for things like travel, entertainment, and even healthcare.
Delay Your Social Security Benefits
What many people don’t know is that if you delay your Social Security benefits past your full retirement age, your benefits will start to grow. Instead of getting 100% of your benefits at your full retirement age, you could be getting 124% at 70 years old.
However, not everyone can afford to delay their benefits past the year they retire. Also, not many people are wanting to work until they’re 70 years old. Try to delay your benefits as long as you can. Each year you don’t take out your benefits, your benefits grow until you reach age 70.
Live a Less Expensive Lifestyle
With retirement comes more vacations, days spent with grandkids, and other potentially expensive activities. However, when living on a budget, it can be hard to enjoy these luxuries. When all else fails, and you can’t make room in your budget for things like this, try to live a less expensive lifestyle.
By this, we mean simply lower your standards on where to go for vacation, or where to spend the day with the grandkids. Instead of vacationing to Europe, perhaps visit a state you’ve never been to before. As an alternative to taking your grandkids to an expensive water park, create your own water park in the backyard.
Coupons Can Save a Ton
If lowering your standards simply aren’t an option for you, consider using coupons for as many things as possible. Want to travel to Europe or take your grandkids to the best water park you can find? Then search for the best deals on the web. Coupons can be accessed for nearly everything. Don’t miss out on these coupons that can save you a ton.
If you haven’t yet reached retirement, you may still have a chance to come up with that extra $27,600 you’ll need each year in addition to your Social Security check. It’s never too late to save for retirement.