6 Ways for Retirees To Get by Before Claiming Social Security
Written by
Adam Palasciano
Edited by
Nicholas Morine
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Retirement is a time to be enjoyed thoroughly. Planning your finances for retirement is key to ensuring that you can enjoy your golden years without any money worries. For millions of Americans, the Social Security system provides an additional layer of financial security to stay solvent after you call it quits at work.
CNBC reported many elect to claim Social Security benefits as soon as possible, at age 62. While most experts agree that it’s best to delay claiming benefits as long as possible to get the maximum monthly benefit, many people don’t wait to claim benefits — either because they cannot or would prefer not to.
For those born in 1960 or later, the current full retirement age is 67 years old, according to the Social Security Administration. By claiming Social Security at age 62, you’ll only receive 70% of your calculated monthly benefit amount for life. From age 62, each month you delay collecting Social Security increases your monthly benefit until you reach age 67. You’ll be eligible for 100% of your monthly benefit by waiting to claim Social Security until age 67.
If you’re going to wait to collect Social Security to maximize your monthly benefit, there are several things you can do before collecting that can save you money.
Here are six ways retirees can get by before claiming social security, according to GOBankingRates.
Eliminate Debt
Eliminating debt should be top of mind if you’re entering retirement. Debt eats a hole in your bank account and creates a financial drain. Be sure to pay off higher-interest debts, like credit cards and auto loans, as quickly as possible. Focus on paying off the highest interest debt first, and then move on to your other debts.
Downsize or Relocate
If you’re calling it quits at work, your monthly income will probably decrease. If you live in a high-cost city or state, consider downsizing your home or relocating to a less expensive area. Changing up your housing situation can save you a bundle in retirement.
Invest Early and Often
Investing your money early and often allows for more compounding. The longer your money has to grow, the greater your wealth will be in retirement. Be sure to prioritize investing every month to ensure long-term financial security.Â
Always Take Advantage of Discounts
Being thrifty and financially savvy can save you a lot of money, especially if you’re entering retirement. Always look for a coupon, sale, or deal before making a purchase. You’d be surprised how much you can save every month.
Stick to a Budget
Budgeting is crucial to stay afloat financially if you’re on a fixed income. Creating and sticking to a budget can help you organize your finances and visualize how much you can comfortably spend in each category.
Revisit Your Insurance Policies
There are so many different types of insurance to pay for: homeowners or renters insurance, car insurance, health insurance, etc. If you’re on a fixed income, it could be worth evaluating your insurance policies each year. Different insurers may offer lower premiums, which will put cash back in your pocket.
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