You need to retire. You saved no money for your retirement. Now what?
The only money you will receive during your retirement is Social Security. Can you actually live on Social Security Retirement Benefits only? Well, that depends on the size of your monthly Social Security check, your monthly expenses and your lifestyle.
Keep in mind that the maximum you can from Social Security is about $3,000 a month if you claim benefits at full retirement age. (Based on 2020 benefits.) Most people are not eligible to receive this amount. The average monthly Social Security benefit is closer to $1,500.
So, how can you retire and live on Social Security only?
You cannot retire with any debt. No mortgage. No car payment. No personal loans. No credit card debt. All debt must be paid-off before you retire.
Reduce your out-of-pocket medical expenses
Even with Medicare, you will end up with hefty bills for co-pays, deductibles, insurance premiums, prescription medicines and services not covered by Medicare. Here are some strategies to reduce your medical expenses during retirement:
- Before having a procedure done, make sure your insurance covers all the medical practitioners and services to be provided and completed.
- Attempt to negotiate high charges and fees with hospitals and practitioners’ billing offices and ask for a discount if you pay in advance … with cash.
Show Your Adult Kids the Door
If you are unable to retire due to paying the expenses of your adult kids still living at home, it’s time for them to leave. Give them adequate advance notice with a specific date they must be out of your house.
Be sure to explain to them your financial situation without giving them ‘specific’ details that they have no need to know.
You worked all your life with the hopes of having a few years in the autumn of your life to retire and enjoy some time to enjoy life. You worked all your life to make it through. Your adult kids need to do the same.
Delay Claiming Early Social Security Benefits
Don’t start receiving Social Security Retirement Benefits until you reach your full retirement age. Your monthly Social Security payment will be less if you start benefits earlier than your full retirement age.
If your life expectancy is short due to illness or disability, or you aren’t depending on your Social Security income, it can make sense to claim sooner. But for the majority of working people, waiting to start receiving Social Security Retirement Benefits until your full retirement age increases your monthly checks by 8% per year until you do claim the benefit. However, at age 70 you no longer get these increases and there’s no reason to delay.
Think About Living Where it is Cheaper
If Social Security is going to be your only source of income in retirement, it makes financial sense to live in a locale where the cost of living is lower. Keep in mind though that moving isn’t always the best solution.
Before you move, be sure to research the cost of living, health care costs and taxes in the area you want to relocate to.
Reduce or Eliminate Entertainment Expenses
Free entertainment is readily available in large and medium size cities. Books, magazines, national newspapers and music media is typically available to use at your local library. And the largest source of free entertainment is the Internet. When you are on a limited income, there’s no need to spend big dollars on entertainment.
Yes, you can live in Social Security Retirement Benefits alone. But, you’ll need to live frugally and simply.