How to live comfortably on a social security income

It’s not always possible to save for retirement, and the Social Security Administration estimates that 21% of married couples and 45% of single seniors rely on social security for 90% or more of their income. It’s not ideal to retire without a nest egg, but here are a few tips on how to live comfortably on social security.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Delay taking social security

Americans can start taking social security payouts when they turn 62 (and Canadians can start drawing on Canada Pension Plan payments at 60), but the earlier you take government assistance, the lower the payments. In many jurisdictions, including the United States and Canada, the payments grow the longer you wait.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Delay retirement

If you don’t have retirement savings or a pension to help you out in retirement, then it behooves you to delay retirement for as long as you can. By delaying your retirement, you can still take advantage of programs for seniors, such as Medicare, without downgrading your lifestyle until it’s necessary.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Pay off your mortgage before you retire

As long as social security is your only income, your home (if you’re lucky enough to own) is an important piece of equity, but mortgage payments may not be feasible on modest social security payments. The AARP (American Association of Retired Persons) suggests that holding a mortgage won’t have the same tax benefits in retirement, so it makes sense to finish paying before you retire.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Eliminate your debt before you retire

You do not want interest to accumulate when your income is only going to decrease, so ensure that you won’t be drowning in debt by eliminating it before you retire. High-interest credit card debt, in particular, can grow exponentially if you find yourself in a tenuous financial position.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Downsize your home

Homeowners can put themselves on better financial footing by downgrading their home before retirement. Not only can they offload any remaining mortgage debt, but American Family Insurance suggests that homeowners spend approximately US$1 per square foot of their home on maintenance, so a smaller home often results in smaller expenses.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Use your home equity

If you have spent your life building equity in your home, you may now take advantage of that equity in retirement. A reverse mortgage or a home equity line of credit can provide you with additional cash with the promise that it will be paid off with the sale of the house, but be wary of leaving the burden of these loans on your children, and be careful to avoid scams that target seniors.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article


Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Relocate somewhere cheaper

Retirees in expensive states or cities may consider relocating to somewhere less expensive for their retirement. Some places offer lower taxes, cheaper real estate and cheaper living expenses, making retirement more affordable for people living on social security, but don’t forget that you will have to foot the bill for moving costs.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Share housing

Loneliness and isolation is a growing concern for seniors, according to the CDC (Centers for Disease Control and Prevention), and it can be compounded by the financial strain of living in a single-person household. Seniors who are single, divorced or widowed can improve their social life and reduce expenses by living together in a shared apartment (like the Golden Girls!) or moving into an assisted living facility.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Become an expat

Retirees who really want to get the most bang for their buck can also choose to move out of the country altogether. Many countries offer both a low cost of living and a warm, sunny climate, but moving may put distance between you and your family, as well as make it more difficult to access services, including healthcare, that you may require in retirement.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Sell your car

You won’t have to drive every day in retirement, so it may be time to give up the car. Maintenance, insurance and gas costs an average of US$773.50 a month, according to AAA (American Automobile Association), so make use of public transit where it’s available, sign up for deliveries when possible, or ask for assistance from friends and family when you leave the house for groceries and other necessities.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Cut expenses

Living on social security or other government assistance means maintaining a modest lifestyle and reducing expenses wherever possible. Try to shop at discount grocery stores, cook meals at home and shop at second-hand stores whenever possible. Check out this list of simple cost-cutting measuresthat could help you stay within your means.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Take advantage of state-sponsored healthcare



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Tap Medicaid for expenses not covered by Medicare

In the United States, Medicare may not cover every health expense, but Medicaid, which is offered to lower-income people, can fill in many of the gaps. Seniors living on social security are likely eligible for both services, and Medicaid can help pay for long-term care in nursing homes, which may be necessary in old age.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Prepare for the death of a partner

In the United States, when one partner dies in a married couple, the other will stop receiving Social Security benefits for the late spouse, and will have to return the benefits received for the month of death and any later months, even if some costs, such as housing, remain the same. Make sure that you and your partner have a contingency plan in place when one of you passes away.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Take advantage of survivor benefits

If your spouse dies, you will not be able to collect his or her social security benefits in addition to your own, but under the U.S. Social Security Administration’s survivor benefits program, you may be able to collect your spouse’s benefits instead of your own if they received more money than you. Canada applies a maximum threshold to the combination of your benefits and survivor benefits.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Apply for government benefits

Many low-income seniors don’t know where to look for government benefits at a state or local level, even if they are eligible. For this reason, the NCOA (National Council on Aging) set up BenefitsCheckUp.org so low-income American seniors can look around for applicable benefits that may improve their standard of living.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Stay healthy

Unexpected health scares can drain your finances, even with government-sponsored healthcare. One way to avoid high medical expenses is to remain physically active and maintain a healthy diet. Eating healthy may cost more in the short run, but it will keep medical expenses to a minimum.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Take advantage of community charities

Low-income seniors struggling to make ends meet should look toward local charities to ease their struggles. Local food banks and donation centres can help seniors get the food and clothing they need to survive, while other charities can assist with housing and other necessities.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article

Learn to be thrifty

Charity-based thrift stores like Goodwill and Salvation Army can offer seniors low-cost options for clothing and other necessities. These second-hand outlets, largely selling donations from the community, can ease financial strain on people with low incomes and make it easier for seniors to get by in their final years.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article


21/21 SLIDES