When it comes to retirement planning, people often don’t consider the importance of their Social Security benefits. However, perhaps we should start thinking of that monthly Social Security check as the key component of our retirement plans. After all, due to a variety of reasons, the majority of us are no longer saving significant amounts to prepare for retirement. Additionally, more and more people are relying upon Social Security for their retirement; 21% of married couples and 43% of singles currently derive 90% or more of their retirement income from Social Security.
So, as many current retirees are demonstrating, you can definitely have a happy retirement while living on Social Security benefits. Here are five things you should consider if you lack significant retirement savings right now and will rely upon that monthly Social Security payment as your primary source of retirement income.
1. Downsize Your Budget
If you’re working right now and plan to rely upon Social Security when you retire, chances are strong that you’ll have to find ways to budget more conservatively when you no longer have a paycheck coming in. The average retiree receives about $1,422 each month from Social Security. That check will have to cover all your key bills, including mortgage or rent, groceries, utilities, and a myriad of other things. Using that average as a baseline, you should determine exactly what you’d have to adjust to live comfortably with your Social Security income. Finding more economical housing and transportation can help reduce some of your higher monthly expenses. Additionally, learning thriftiness now when buying groceries and other items will help you get the most out of your monthly benefit check when you do retire.
2. Delay Retirement
Another way to have a happy retirement while living on Social Security benefits is to delay your actual retirement for as long as you can. If you’re healthy enough to work and generally content with your career, you’ll be able to save more money for retirement longer and optimize the high standard of living you currently enjoy. Additionally, waiting longer to retire will help you maximize your Social Security benefits. In fact, if you wait until 70 to retire and begin collecting, your monthly benefits will be over 75% higher than if you’d begun collecting them at your earliest eligible age.
3. Get Out of Debt
Debt is a serious problem in the United States. The average American household now carries about $16,000 in credit card debt from month to month. Debt and the high payments that accompany it can make it extremely difficult to live on a modest fixed income. If you plan to rely upon Social Security when you retire, you should take action now to pay off your debts. If the high balances on your credit cards and other debts are too high for you to deal with on your own, debt settlement services may be just what you need to be debt-free when you retire.
4. Leverage Other Entitlements
Another way to get the most out of your Social Security benefits is to augment them with other benefits and programs for which you’re eligible. Every dollar of benefits you find elsewhere is a dollar more you have to spend, after all. Find out as much as you can about Medicare and other healthcare programs at the state and federal level for which you may be eligible. Healthcare is often one of the most significant retirement costs you’ll have to contend with, so understanding your benefits in this case is critical. You should also look at other entitlement programs for which you may be eligible. For example, you may qualify for housing and food subsidies that could augment your fixed Social Security income. Before you retire, try to learn as much as you can about potential entitlements you may be eligible for, so you can take advantage of them right from the start.
5. Pool Your Resources
If you’re getting ready to retire, you should try to find a friend with whom you can split all the bills. Having a roommate can help defray many of the key expenses that you’ll have to contend with on a fixed retirement income, such as rent, utilities, and groceries. Teaming up with other retirees is a great way to get the most out of those monthly Social Security checks. If you find a person or persons with whom you’re compatible, you’ll double the benefits, too. You’ll have more disposable income for doing the things you want to do in retirement, and you’ll have great companions to enjoy the time with as well.
A Happy Retirement with Social Security Benefits
You can have a happy, healthy retirement living on your Social Security benefits alone. However, doing so takes a little bit of planning, some lifestyle changes, and managing expectations. If you follow the tips suggested here and start planning now, you’ll be ready to enjoy your retirement right when that first Social Security check is deposited into your bank account.