Retirees: 5 easy ways to cut retirement costs
If you are comfortably retired, congratulations! You worked hard, spent your money frugally, saved your money consistently and invested your money wisely.
And in case you hadn’t noticed, you’re definitely in the minority.
A vast majority of Americans nearing or at retirement age don’t know when they’ll be able to retire. They just know it’s not going to be for a while.
According to the St. Louis Federal Reserve, employment levels for those 55 and older is much higher than it used to be.
Twenty years ago, there were nearly 16 million people ages 55 and older who were employed. Today, there are more than 35 million still earning a paycheck. That’s a 121 percent increase.
And if you go back to the previous decades, there were far fewer seniors working than there were 20 years ago.
Many Baby Boomers Aren’t Booming Anymore
Now, part of this can be explained by the fact that there are more Americans over 55 years of age than in the past. That’s due to the huge number of aging Baby Boomers in this country.
But that doesn’t even begin to tell the whole story.
The real culprit is that prices have risen more quickly than salaries. Especially for items such as healthcare coverage. And that means Americans have not been able to save as much for retirement as they had hoped to.
So, they are working later in life. Often in jobs holding no interest for them. And that don’t pay very well. But you do what you have to do to survive and care for your family.
What Happened to Our Savings?
Fifty years ago, Americans were saving nearly 12 percent of their pay. Now the average is 5.5 percent. And many people are not able to do even that.
A study from Go Banking Rates shows that more than one-half of Baby Boomers ages 55 to 64 are living paycheck to paycheck. Often with little or nothing saved for retirement.
Some retired people who have worked their entire adult lives are dealing with medical expenses that are higher per month than their Social Security checks.
Well, you’ve probably heard enough financial doom and gloom from me for one day, right? This information is especially difficult to read for people who find themselves in this exact position.
Fortunately, there are a few things seniors can do to better deal with this problem.
Light at the End of the Tunnel
One, of course, is to continue working as long as your health allows. This might not be fun. Especially if it is a physically demanding job better suited for someone in their 20s or 30s. But it’s better than not having work.
Next, make sure you have a budget mapped out accounting for every dime you spend. It can be tedious work. Particularly when you first sit down to create it. But it will save you plenty of money over time.
Make sure that savings is one of your line items. Even if it’s a small percentage for a while until you get expenses under control.
Third, read everything you can about cutting back on expenses. Not everything will apply to your personal situation. But some of the ideas will.
What you spend each month is just as important as what you earn. Almost everyone can save more money by following a few tried and true guidelines.
Try to Rein in Healthcare Costs
Fourth, take time to figure out what your best healthcare options are. Seniors can choose between Medicare and Medicare Advantage. One may be significantly better than the other for your individual needs.
Fifth, if you’re not already collecting Social Security, hold off as long as possible. The earlier you start getting those Social Security checks, the less money you’re going to receive over time.
There are always rumors that Social Security will dry up. But the experts don’t think that could start happening until the mid-2030s. So be patient if you can.
Things look bleak for aging Americans. I’m not going to sugarcoat that. But as a nation we’re known for battling against the odds and winning. This is just one more test of our strength and resolve.
What a huge disappointment, period!!!
This sounds like a plug for Dave Ramsey. If not it should be…………he has helped millions! And he shows them how to do it!
Look up Financial Peace University (FPU) , take your future money conditions into your own hands. (now that WAS a plug for FPU)
Great advice, Jack. The church I attend offers a 10-week FPU course several times a year. It’s helped a lot of people get back on track financially.
When I retired in 2001 from Verizon at 60.( they made me an offer I couldn’t refuse) the word out was if you retire at 62 you will collect more money because those that wait until 65 and older don’t live as long. I’m 75 years old .doing 200 push up a day because my left knee isnot good in 5 sets of 40through out the day. How do you now come up with your theory of working longer ?
So if I will be 66 three months from now, why should I hold off until later, up to 70 before starting to collect my Social Security? If I start at 66 as opposed to waiting, it will take the larger amount of Social Security until I am 80 years old to catch up with the extra amount I receive if I start earlier. Plus even though, at that point, I will be receiving less for the rest of my life, I will still be getting the amount I started with. Plus, if I am expecting a sizable inheritance within the next 10 years then the extra $700 per month I would get if I waited until 70 may not be significant as compared to the inheritance. Therefore, I feel I should start collecting my SS at age 66 and be able to earn as much as I wish each year.
I welcome you comments
Thank you
Let’s stop calling welfare “entitlements”. It’s not an entitlement; it’s a hand-out. An entitlement is money you earned by working, i.e. retirement benefits, social secutity, etc.
As a patriot company, have you heard of AMAC (https://amac.us/) Association of Mature American Citizens? It is a conservative alternative to AARP. I have as I did not want to give a liberal group like AARP my money or be forced into that group, like they tried to do recently.
Just passing on more conservative info.
I’m a 42 year old female with 3 teenagers at home. I haven’t been saving or investing because we live paycheck to paycheck ourselves. I did however manage to buy a home which I will have paid off soon after all my children leave the nest. At that point I intend to still live paycheck to paycheck so I can put as much money into retirement as possible. I don’t like this plan but it is the only one I am able to do.