Guest Post by Aiden White
According to CNBC.com, Americans will get $1 trillion in Social Security alone this year. And it is expected that the Social Security benefits will increase by 1.3% in 2021. If the predictions come true, then it will be the lowest Social Security benefits increase in the country.
On average, a retiree gets $1500 from Social Security every month. The benefits depend on your age, how soon you decide to take Social Security benefits, and your average income. While this is not a huge amount, millions of Baby Boomer retirees are still spending their golden years living on Social Security benefits alone.
If you are planning to live solely on Social Security income after retirement, then it is imperative that you follow these four tips from now on.
1. Wait for the right time to claim your Social Security benefits
If you claim your Social Security at 66 years, then you can claim 100% benefits. After you cross 66, each year your Social Security benefits will go up by 8%. This implies that you will get 32% more Social Security benefits than what you received earlier after turning 70.
If you claim your Social Security benefits at a young age, then you will get reduced Social Security benefits. When your normal retirement age is 66 years, and you claim Social Security benefits at 62 years, you will receive 25% less than what you are supposed to get under normal circumstances.
2. Determine how much you need after retirement
Determine the amount you will need to cover your living expenses post-retirement. Next, calculate the amount you will earn after retirement. You should include your expected Social Security income into this. Think about any financial resources or assets that you are likely to have post-retirement. Based on your calculations, you can decide the kind of life you are likely to have post-retirement. If the amount is not enough to lead a comfortable life, then you can consider the next tip.
3. Think about ways to cut expenses
When you do not have a massive amount of money, you have to be creative to have a comfortable life after retirement. For instance, you can rent out a room in your house to augment your retirement income. You can move into a small apartment to reduce expenses. Even if you could save $100 on the housing expenses, then that’s a lot. You can use the money for other expenses.
You can also relocate to an affordable area that could help you save thousands of dollars on living expenses. For more ideas on how to reduce your expenses, read blogs on frugal living tips for seniors.
4. Explore retiring abroad
Many Baby Boomers living on Social Security alone have relocated to countries where the dollar goes a lot further. Comfortable retirement on $1500 monthly is possible in Mexico, Panama, and Ecuador for example. These countries typically offer low-coast health benefits and the amenities that Americans take for granted.
A huge debt burden can take a toll on your financial life. So, Baby Boomers should try to reduce it before retirement. Pay off your credit card debts and lower other debts as soon as possible. Explore options to reduce your monthly expenses. Get creative in your thinking. Don’t give up hope. There are a variety of solutions and assistance programs out there that can help you find what works best for your situation.
Aiden White is a financial writer who lives in Dudley, Massachusetts. She started her financial journey in 2015 and has been associated with consolidatecreditcard.org for the last 2 years. Through her writing, she has inspired people to overcome their credit card debt problems and solve their personal finance based queries. Being a debt fighter in her personal life, her goal is to share innovative thoughts and knowledge in the debt communities. Get in touch with her at email@example.com.