I have no retirement savings, but my Social Security check is $1,900/month — can I live comfortably on that?
Social Security benefits were meant to bolster existing retirement savings and pensions — not to make up for a non-existent nest egg. But is it possible to live off the governement's safety net?
According to the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP), 49% of adults between the ages of 55 and 66 had no personal retirement savings.
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When broken down further by sex, that comes to 46.8% of men and 50.2% of women that don’t have funds set aside for their golden years.
The data also says that 12% of men and 15% of women aged 65 and older rely on Social Security for 90% or more of their income.
Let’s say you’re 65 years old and set to retire in a few months. You don’t have any retirement savings, but you’ll receive a monthly Social Security check of $1,900 — just slightly more than the $1,800 monthly average for retired workers as of June 2024.
Is it possible to live comfortably on what essentially amounts to roughly $23,000 a year? Here are five possible actions that may assist retirees without retirement funds.
Consider downsizing your home
Whether you rent or own property, one way to help free up some money in your retirement years is to downsize your home.
If you no longer need the same square footage you once did when you were working, you can even consider looking outside your home city or state for areas where property taxes are lower and insurance costs aren’t as high.
For example, if you rent (or plan to rent), do some research into cities and states that have affordable rates.
According to Apartment Advisor, West Virginia, Kansas, and Arkansas charge a median rent for a one-bedroom at $725, $755, and $825, respectively. That’s significantly lower than the national average rent of $1,536 per month.
If you own your home and your mortgage is paid off, consider turning your equity into retirement cash by downsizing. According to the U.S. Census Bureau’s 2022 American Community Survey, 33.3 million Americans were mortgage-free.
Research various discounts and freebies
AARP is an excellent resource for retirees. A one-year membership is $16 ($12 for the first year with automatic renewal) and the potential benefits number in the hundreds. Some offers apply to everyday services such as restaurants, gas, and shopping expenses.
Others include discounted car insurance, reduced fees on lenses for glasses, and free tickets to live performances. For a full list of the AARP benefits, click here.
In addition to AARP, GoFundMe has a list of 25 retiree-friendly programs you can take advantage of, ranging from Meals on Wheels to low-income home energy assistance programs.
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Sell your car or trade it in for a cheaper model
As personal finance celebrity Dave Ramsey has opined on his show, owning a car can keep people living paycheck to paycheck.
The carrying costs with a car are many, from soaring gas prices and unexpected maintenance to costly insurance, the latter of which spiked to a 47-year high last December.
Selling your car — provided you can opt for reliable public transit or rideshares — will put money in your pocket almost immediately.
If public transportation is a no-go, consider trading your car in for a cheaper model. The World Population Review states that a used car can range in price anywhere from $31,000 to $41,000, depending on where you live.
Receiving benefits while working
One nice wrinkle of Social Security is that you can still work and earn benefits.
In 2024, if you fall under the full retirement age (67 for those born after 1960) for the entire year, you can earn up to $22,320 annually without seeing a cut to your payments.
If you earn more, the SSA makes a modest cut of $1 from your check for every $2 you earn above the annual limit. Even when you reach full retirement age, the government deducts $1 in benefits for every $3 you earn above $59,520.
Choose experiences over things
Even if it’s possible to purchase the occasional big-ticket item on a limited income, it won’t necessarily alleviate boredom, isolation, or depression — especially in the long term.
According to a 20-year study conducted by Cornell University psychology professor Thomas Gilovich, when it comes to true happiness, buy experiences — not things.
This doesn’t mean breaking the bank by booking an endless stream of overseas trips. Experiences can include leisurely coffee hangouts with friends, doing volunteer work, becoming a local tour guide, taking art classes, or signing up for dance classes.
The American Psychological Association notes that 25% of adults lowered their risk of depression when they logged about 2.5 hours of brisk walking a week.
Websites such as VolunteerMatch can also help you find opportunities that will get out of your living space so you can enjoy cost-effective activities.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.