When you’re budgeting for retirement, it helps to know how much is Social Security and how far you can stretch the average benefits. As of September 2017, the average Social Security benefit is $1,259.06 per month.
Social Security is designed to replace about 40 percent of your earnings, so it’s not intended to be your only source of income during retirement. However, depending on where you live and how frugal you are, you can still stretch the average Social Security benefit to cover a lot of expenses.
A 1-Bedroom Apartment in Many Cities
A GOBankingRates study found 20 cities where you can rent a one-bedroom apartment for under $1,000. The cities include Cincinnati and Columbus, Ohio; Omaha, Neb.; Fresno, Calif.; Billings, Mont.; Waterbury, Conn.; and Boise, Idaho. In El Paso, Texas, the city with the lowest rent in the study, one month of the average Social Security benefit could cover over two months of rent at $550 per month.
Of course, if Social Security is your only source of income, you don’t want to spend it all on rent. Instead, you might need to downsize or pick an apartment with fewer frills.
Over 4 Months of Groceries
The average person age 65 and older spends $267 on groceries each month, according to a GOBankingRates study. At that rate, you could buy about 4.7 months' worth of food with your monthly check.
If you like going to restaurants, you can still save money when eating out by taking advantage of local deal sites or going out for lunch instead of dinner.
Rent and Utilities for 6 Months in Kathmandu, Nepal
If you catch wanderlust in your golden years, you could use your Social Security check to pay for rent and utilities. For a monthly cost of $205.79, you can afford over six months of rent and utilities in Kathmandu, Nepal, according to another GOBankingRates study.
Other exotic locations where you could pay for rent and utilities for less than $350 per month include Playa del Carmen, Mexico; Marrakech, Morocco; Bangkok, and Istanbul.
An iPhone X and a Case
The Apple store lists the iPhone X with a retail price of $999. You can add an Otterbox Pursuit cover for $69.95 to protect your investment in case you drop it.
Though your monthly Social Security check will cover the cost including sales tax, it doesn’t include the monthly cost of cellphone service. It also assumes you don’t have anything else to spend money on during the month. Instead, consider buying a smartphone like the Doro PhoneEasy 626 from Consumer Cellular, which costs $50 and has plans that include data starting at just $20 per month.
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The Average Mortgage in Ohio or West Virginia
Ohio and West Virginia have the lowest average monthly mortgage payments in the country, at $793 and $796 respectively, according to a GOBankingRates study. However, lenders usually limit your monthly mortgage payment to 28 percent of your monthly income, which means that if your $1,259 of Social Security is your only income, your mortgage payment shouldn’t be more than $352.
So, even with an average mortgage in Ohio, you’d still need more than double the average Social Security benefit to reasonably afford a mortgage. On the other end of the spectrum, a mortgage in Washington, D.C., or Hawaii will run you $2,718 and $2,916, respectively.
9 Months of Medicare Part B Insurance
If you have 40 or more quarters of work credit, you won’t have to pay for Medicare Part A insurance. However, Part B insurance isn’t free.
As of 2017, the cost is $134 per month — or higher, if you have a high income. Part B covers medical services and supplies, including lab tests, surgeries and wheelchairs. After paying the yearly deductible of $183, you pay 20 percent of the Medicare-approved charges for covered services.
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5 Months of Long-Term Care Insurance
If you’re concerned about future healthcare costs, getting a long-term care policy can help you sleep better a night. Depending on the policy, long-term care insurance can cover future costs of a nursing home, assisted living, in-home care and home modifications.
For a 60-year-old couple in good health, you can buy a policy with a $150 maximum daily benefit that can continue for up to three years for $247.50 per month.
2 Rounds of Golf at Pebble Beach
If you love playing golf in your golden years, you could use your monthly Social Security benefit to pay for two rounds of golf at beautiful Pebble Beach, Calif.
Each round costs $495, plus $40 for a cart and $90 for a caddie — which comes out to $625 per round, or $1,250 for two rounds. But you’ll probably need to dip into your next month’s benefit to cover the tip for your caddie. It might be an experience you’ll remember for a long time, but it’s probably not the best use for your Social Security benefits.
6 Credit Hours at Florida State University
Whether you’re looking to go back to school or you’re paying for college for a child or grandchild, you could pay for just under six credit hours each month at $215.55 at Florida State University’s main campus.
If you want to help your descendants save for college, consider putting money into a 529 plan during your working years. The money in the 529 plan grows tax-free. And as long as the money is eventually spent on qualifying college education costs, all the distributions are tax-free.
One-Third of a Month at an Assisted-Living Facility
The average cost of living in an assisted-living facility is $3,750 per month in the United States, according to Genworth Financial. If you only need adult day healthcare, the cost drops to $1,517. In 10 years, costs are projected to rise to $5,040 per month for assisted-living facilities and $2,039 for adult day care.
57 Months of a Planet Fitness Black Card
Planet Fitness offers a black card that allows you unlimited access to all of its gyms for $21.99 per month. Though a gym membership might seem unnecessary, it can be a worthwhile investment if it helps you maintain your health. Living a healthy lifestyle can help reduce your medical expenses in retirement.
If there’s only one gym you use, a Planet Fitness membership for just your home club costs only $10 per month. Or, you can always find free ways to exercise like taking a walk or riding your bike.
2 Days of Renting a BMW M6
If you love driving fancy cars, you could blow your monthly Social Security benefit in just a few days renting exotic cars. For example, Vanity Exotics rents out a BMW M6 for $599 per day with no additional charge for the first 75 miles. So, for your $1,258 benefit, you could pay for two days with $60 to spare for gas.
Instead, consider downsizing your garage to just one vehicle (if you have more than one) to save on maintenance, registration and insurance costs.
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1 Bottle of Chateau Lafite Rothschild 2009
At $1,179, one bottle of Chateau Lafite Rothschild 2009 will use up almost all of your monthly Social Security benefit. It might taste great, but having a refined palate for wine can quickly consume a large chunk of your budget. Of course, you can also get good wine for under $20, but it adds up even if you’re just getting a bottle a few times a month with meals.
Instead, consider drinking water in place of wine or soda with your meals. Not only will it save you money, but it can help you stay in shape, too.
145 Trips to Movie Theaters
In 2016, the average movie ticket price was $8.65, according to the National Association of Theatre Owners. This means you could see 145 movies at that price before you exhaust your monthly Social Security benefit. However, that doesn’t include the cost of popcorn, drinks or desserts at the theater.
To save money, consider waiting until the movie comes out on DVD and borrowing it from Redbox for $1.50 a day or borrowing it from a library for free. Then, you and other friends can gather to watch it and have snacks for less than it costs for one of you to see a movie alone.
1 Louis Vuitton Bag
For the low price of just $1,200, you, too, can own a Louis Vuitton Alma BB Bag. But that’s about all you’ll be able to purchase with your monthly Social Security check.
Instead of blowing your benefits on high-priced, name brand handbags, jewelry and other clothing, consider shopping at thrift stores like Goodwill to get good clothing at a lower price. Plus, many Goodwill stores offer additional discounts for seniors, making your dollars stretch even further.
Disclaimer: Some photos are for illustration purposes and might not be of the actual item.