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Retiring on just Social Security alone

by George Aughey

After searching the web for articles to see if people can retire with only their Social Security retirement benefits, I found out most of the articles talked about how to invest or save before retirement so you can retire comfortably.

In this piece I’m going to talk about retiring only on your social security benefits. How could this have happened? Many ways. You:

  • Never had a retirement plan
  • Didn’t make enough money to put into a retirement plan
  • Had financial disasters which caused you to use your retirement plan before retirement

These are just a few of the things that happen to people to get them in that position.

OK, you’re in retirement. For some people there will be hardly any change in their lifestyle at all. They never made a lot of money in their lifetime and it’s no different now. For a lot of people though, soon after you get your first Social Security check, you’ll find out if you think you can to make it or not. The truth is, anyone can make it. It may take a lot of changes in lifestyle and tightening the belt at lot, but you can make it.

You’re retired and collecting Social Security benefits. I’m going to assume we’re talking about a couple and that the amount of your Social Security benefits and your age don’t matter, because they really don’t matter. Certain things need to be done and quickly, because it’s a long process and you don’t want to run out of money because you didn’t do it.

· You need to set up a budget with at least the following categories, along with any others that fit you:

  1. Housing – property tax, HOA, maintenance, repair, insurance, rental, etc.
  2. Transportation – car maintenance, gas, and insurance
  3. Utilities
  4. Groceries
  5. Prescription, co pay, and other medical needs
  6. Medicare and other Medicare type of insurance
  7. Clothes
  8. Entertainment and misc. – eating out, vacations, etc.

Write in the exact amount next to each budget item.  It doesn’t matter what the amounts are, because they’ll probably change anyway. But you need to start with real amounts. Now add all the items together to see they’ll cost and compare the total to the total of your Social Security benefit each month.

If you’re like most retirees with no other retirement benefits, you’re probably thinking, “OMG, what are we going to do?”

· You need to go through your budget one item at a time to decide which things you need and which things you want.

o Entertainment – Do you really need all the cable channels and extras you’re paying for? Or do you really need to eat out all the time? Go through each together and decide as a couple.

o Clothes – Most retired seniors don’t have the need for a lot of suits or evening gowns, etc. Most of the time it’s casual clothes. Donate what you don’t need. It will make you feel better and you’ll be helping someone.

o Medicare and other Medicare type of insurance – you need to be really careful here. You may be in great physical condition now, but that may not last forever. Contact all the Medicare insurance add on companies in your area and get an appointment with each. Pay particular attention to Medicare Advantage plans and to those who offer Medicare Part D benefits.

o Prescription, co pay, and other medical needs. If you do the above right, that will all be taken care of.

o Groceries – think of eating at home and often. That way you can make use of leftovers, save money and a ton of calories.

o Utilities – Whether you’re in a house or an apartment think of ways to cut down on heat and/or air conditioning. Cable bills can be put into this category or in entertainment. Do you need a landline or can you use your cell phone as your primary phone?

o Transportation – car maintenance, gas, and insurance. Shop for all these at many different places and choose which fits you, not your agent.

o Housing – property tax, HOA, maintenance, repair, insurance, rental, etc. It may be cheaper to sell your house and move into an apartment, condo or a Co-op, as most of the items in this category will be taken care of by the property owner or Association fee..

If this seems like a lot of work and possible sacrifice, it can be both. But to live on just Social Security alone, you both have to do the work and accept the sacrifices. After a while you’ll find you’ll start thinking of things you can do together which are cost effective and where you can enjoy your new lifestyle together.

by George Aughey


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