Twenty-four percent of those aged 65 and over live in families that depend on Social Security benefits for 90 percent or more of their income, according to the AARP Public Policy Institute. With the average monthly benefit at $1,404, retirees who rely on Social Security to pay for all of their living expenses are on very tight budgets. Fortunately, there are measures you can take to make your benefits stretch, and there are plenty of discounts and perks seniors can take advantage of once they do retire, allowing them to live a rich life with limited funds.
Click through to find out ways to prepare for life on social security.
1. Delay Taking Your Social Security Benefits
Retiring from work and beginning to collect Social Security are two reasons to celebrate getting older. Although you are able to start collecting Social Security at age 62, your monthly benefits will be significantly higher if you wait until you reach your full retirement age, which ranges from 65 to 67 depending on the year you were born.
For example, if your full retirement age is 67, but you start collecting Social Security at 62, your benefits will be 30 percent less than they would be if you waited the additional five years. If possible, wait to start collecting until even after you reach your full retirement age. If you delay collecting Social Security until age 70, you will receive your maximum Social Security benefits.
2. If You Already Filed for Social Security Early, Consider Withdrawing Your Claim
Did you claim your benefits early and now find that you’re shocked by the true costs of retiring on Social Security? If you filed for Social Security within the past 12 months, you can withdraw your claim and restart at a later date if you want to increase your benefits. However, it’s important to note that if you choose to withdraw, you must repay all the benefits you received up to that point. Still, this could be worth it in the long term to be able to max out your Social Security payments.
3. Plan Out Your Social Security Survivor Benefits
If you are married, it’s important to discuss how to maximize Social Security benefits should one spouse die. When one person dies, the widow or widower can receive the deceased spouse’s benefits instead of their own if the benefits are higher than what they were receiving before. So it makes sense for the higher-earning spouse to retire later so that when two Social Security checks coming to the household become only one, the surviving spouse will receive the greatest benefits possible.
4. Move to an Area With a Lower Cost of Living
Your Social Security benefits will stretch further when your cost of living is lower. If you live in an expensive location, consider moving to a place where you can live on only a social security check. Cities like Tuscon, Ariz. and Reno, Nev. have warm weather and plenty to do for retirees, plus their cost of living is low. And in Reno, rent is under $1,000 a month.
5. Pay Off Debt Before Retiring
To make the most of your Social Security income, it’s best to pay off all debts, including credit card bills and mortgages, before retiring. This way you can focus on putting your benefits towards what you need day-to-day, rather than spending it on things you purchased in the past.
6. Relocate to a Tax-Friendly State
Most states and Washington, D.C. do not tax Social Security benefits, but you can make your benefits stretch even further if you live in a state with even fewer taxes. Alaska and New Hampshire levy no tax on sales or income, and Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming do have sales taxes but don’t impose state income taxes or taxes on pension income, according to AARP. If you want to move to Texas, consider moving to El Paso, which is the best city to retire on a budget of $1,000 a month, according to a 2017 GOBankingRates study.
7. Get a Roommate
Splitting living expenses with a roommate or housemate is a great way to make your dollars stretch further, plus it can prevent the loneliness that often comes with being a retiree. A SmartAsset study found that in some major cities, renters who split a two-bedroom with a roommate save more than $800 a month over those who rent a one-bedroom on their own. Even if you are not renting, having a roommate can lower the amount you spend on utilities, internet, cable and energy.
8. Take Advantage of Free Entertainment
You don’t need to spend any of your Social Security check to stay busy and have fun. Go to a museum with free admission or check out a library book to stay entertained during the day. You can also attend open mic nights at a local coffee shop or theater, which often do not charge an admission fee. Other free activities include attending book readings, going to a lecture at a local college or university and attending free outdoor concerts.
9. Invest in an AARP Membership
An AARP membership costs $16 a year, but the discounts can earn you the membership fee back plus more. AARP members get savings on health and wellness expenses, restaurants, entertainment, shopping and community memberships that go beyond regular senior discounts.
10. Move to a Retirement Community
If you are planning to relocate, moving into a retirement community could be cheaper than purchasing a new home in the area. “They’re often cheaper than the surrounding homes in the market that are open to everyone,” said retirement coach Sara Zeff Geber. Plus living in a retirement community makes it easier to socialize with other people your age. However, you need to be realistic about what you can actually afford with your Social Security check, as some luxury retirement communities can be really expensive.
11. Go to Restaurants That Offer Senior Discounts
Living on Social Security will mean you’re on a pretty tight budget, but it’s okay to eat out every once in a while — especially if you go to a restaurant that offers a senior discount. Many popular chains offer up to 25 percent discounts on meals for people 55 and older. For example, Chili’s offers a 10 percent senior discount every day and Uno Pizzeria & Grill has a 25 percent discount for seniors on Wednesdays, according to The Senior List.
12. Ask About Senior Discounts When Booking Travel
Having more free time gives you more freedom to travel, whether you want to go visit relatives who live far away or travel to a place you have never been before. Flights and hotels can be expensive, but you can save on both by taking advantage of senior discounts. American Airlines, Southwest Airlines and United all offer discounts for travelers age 65 and up, but you might need to call the airline directly to request these perks. You can save even more if you are an AARP member and fly British Airways, which offers up to $200 off flights for members. Many hotel chains, including Best Western, Comfort Inn and Staybridge Suites, also offer senior discounts.
You can also save money by traveling during off-peak times since you’ll have a more flexible schedule.
13. Save While You Shop
Sprucing up your wardrobe doesn’t have to take a big chunk of your Social Security check. Many major retailers offer discounts to senior shoppers: Banana Republic gives 10 percent off to shoppers age 50 and up, Kohl’s gives shoppers 60 and above 15 percent off every Tuesday, and Ross has a 10 percent off Tuesday deal for anyone age 55 and up, according to The Senior List.
14. Don’t Overpay for Prescriptions
Medication costs can really add up. To save money on your prescriptions, always opt for the generic when possible. And consider joining a prescription membership program wherever you buy your medication to receive discounts and earn rewards. For example, the Rite Aid Rx Savings Program gives members 15 percent off or more on meds, and a 30-day supply of most generics costs only $9.99 with the plan.
15. Spend an Afternoon at the Movies
A more flexible schedule means you can go to the movies any time of day. Consider going to an afternoon showing so that you can take advantage of matinee prices. Not into the idea of an afternoon movie visit? Some theaters give senior discounts no matter what time of day you take in a flick. Cinemark offers Senior Day discounts, Showcase Cinemas offers discounted tickets plus popcorn deals for seniors on Wednesdays, and AMC offers up to 60 percent off tickets for seniors on select days of the week, according to Senior Discounts.
To save even more, plan a movie night at home. Many libraries offer free movie rentals, so all you need to do is pop some popcorn to have the perfect night in.
16. Get Outside
An easy way to stay active for free is to go for a daily walk or hike. Make a morning walk around your neighborhood part of your daily routine, or visit a local hiking trail to enjoy the nature in your area. Going for hikes during times when most people are at work saves you the hassle of dealing with crowds, so you can really enjoy the peace and quiet of the outdoors.
One of the best ways to feel good is to give back to those in need. Volunteer your time to a cause that’s important to you — it’s a free way to spend your time that benefits others as well.
18. Go Back to School
Many local colleges and universities allow seniors to take college classes for free thanks to tuition waivers for residents age 60 and older. Even if your local higher education institution doesn’t offer a tuition waiver, you might be able to audit classes for free. This means you can attend all classes and lectures, but you won’t receive a credit for the classes you take. One benefit of auditing is that you don’t have to deal with exams and homework assignments.
19. Try a New Gym Class (for Free)
You might not have had time to hit the gym regularly while you were working, but now there’s no excuse to not be active. Medicare members can join the free SilverSneakers program, which gives seniors access to over 14,000 gyms and fitness centers across the country. Not only do you have full access to participating gyms, but SilverSneakers members can enjoy free classes at the gym and beyond. If you’ve never tried yoga or want to dance your way to health, you can do so without spending a dime.
20. Go on a Cruise
Going on a cruise is a great way to visit a new area, and most come with all meals included so you don’t have to worry about added expenses once you’re on board. Many cruise lines offer senior citizen discounts, including Royal Caribbean, Celebrity Cruises and Carnival.
Click through to read more about what Social Security will and won’t pay for.