Getting older can be a very expensive in the United States. Unless you begin saving for retirement at a young age, life can get progressively expensive as you get older.
This is especially if you must live solely on the income generated by Social Security.
More than 40% of Americans live solely on the benefit they receive from Social Security and the typical Social security benefit is $1,500 a month, or about $18,000 annually. That’s right around the poverty threshold for an elderly couple.
If Social Security is your sole source of income here are five ways to maximize it.
If you are over the age of 65 you may have spent decades living in the same place collecting emotional artifacts that represent an entire life. A home or an apartment can represent an emotional identity to someone with a lifetime of memories.
However, the typical retiree spends more than $40,000 in annual expenses. If Social Security is your sole income source, you may have no choice but to downsize to a smaller house or apartment in a city with a lower cost of living.
Develop a budget
Since you are living on a severely fixed income you must now prioritize every purchase aside from cost-of-living expenses. Create a detailed and itemized budget for your income, expenses, bills, debts, and purchases.
Look over all of your bills and assess which services you can potentially downgrade or go without. Reassess all of your regular purchases and cut unnecessary items based on need versus want.
Take advantage of every financially beneficial opportunity that presents itself to you as you get older. Almost every business institution, private or public, offers senior discounts to qualifying patrons.
From public transportation, retail, restaurants, public parks, pharmacies, hotels, and more, you may qualify for a senior discount on services ranging from 10% to 25% or more.
The problem is that most places don’t explicitly advertise that they offer senior discounts, so don’t be shy about asking.
Also, the age qualification for a senior discount differs from place to place. You could be as young as 50 and qualify for a senior discount.
Don’t be shy about asking about senior discounts or feel bad about getting older. Senior discounts are abundant, not advertised often, and can help you save money.
Move to a state with no income tax
If you are in the market for downsizing, you may want to consider moving to a state with no income tax.
There are nine states that don’t tax their residents. They include:
- New Hampshire
- South Dakota
Moreover, these states don’t tax Social Security benefits, retirement-derived incomes or pensions.
Saving money may be easier said than done when living on a fixed income. But when it comes to money it isn’t how much you have, but what you do with it that matters.
Save as much money as you, even if it’s only just some spare change daily. In this economy, making the most of every penny helps.