The average social security payment as of August 2023 was $1,705.79 each month. This amount may differ based on who gets it. For example, most retirees often receive more than this average. If you’re wondering if this payment is enough to take you through the month, this article is for you. We’ll look at signs that suggest people can manage to live a decent life on this money.
1. Living in a Low-Cost State
The state you live in significantly impacts your cost of living. People willing to live in a state with lower expenses, especially in terms of housing, can significantly lower costs. If you can find rental properties or homes that match your Social Security income, it’s a positive sign. For instance, states like Alabama, Oklahoma, and Mississippi offer more affordable living options compared to expensive states like California, Hawaii, and Massachusetts.
2. Paying Less for Essentials
Beyond housing, the overall cost of essential goods and services matters. If your region offers lower prices for groceries, healthcare, transportation, and utilities compared to other places, it means your Social Security income can go further. This means you can maintain a decent lifestyle without straining your budget.
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3. Having Little to No Debt
Debt can be a huge burden, especially when you’re relying primarily on Social Security. Clearing debts like credit cards, loans, or mortgages significantly reduces your monthly expenses. When you have fewer financial obligations, your Social Security income can cover your basic needs more comfortably.
4. Willingness to Live Modestly
Adapting to a more modest lifestyle might involve making some changes. For instance, downsizing your home or using public transportation instead of owning a car. It’s about reassessing your priorities and making adjustments that align with your income. People willing to make small changes, like cooking at home instead of dining out, can significantly lower their overall costs.
5. Good Health
Being in good health is a valuable asset, especially when relying on a fixed income like Social Security. Avoiding frequent doctor visits or costly medical procedures reduces healthcare expenses. It’s not just about avoiding medical bills; good health means fewer unexpected expenses, allowing you to manage comfortably on your Social Security check.
6. Willingness for a Side Hustle
If relying solely on Social Security isn’t enough to cover your expenses, being open to a side job can be a solution. A part-time job can supplement your income, filling any gaps and making your Social Security dollars go further. The advantage of a side hustle is that since you’re not reliant on it for your entire livelihood, you can choose something enjoyable or flexible.
7. Being Single
Being single without dependents or a spouse can make it somewhat easier to manage life on a Social Security check. However, it’s essential not to overlook potential benefits within the Social Security system related to a spouse. If both you and your spouse have different earnings histories, optimizing the timing and strategy for claiming Social Security benefits can significantly enhance your combined income. Seeking advice from a financial advisor can help navigate these intricacies and maximize overall income.
8. Not Struggling to Pay Bills
If you’re currently having difficulty paying your regular bills even before retirement, relying solely on Social Security might not be feasible. Retiring could potentially strain your monthly expenses further if you’re already feeling financially squeezed. It’s crucial to find ways to reduce your expenses and manage your bills without relying excessively on credit.
9. Having an Adequate Savings Balance
Your savings relative to your expected retirement age play a crucial role in determining if Social Security alone will suffice. Financial advisors often recommend having substantial savings, around 10 to 12 times your annual pre-retirement income. Falling short of this benchmark might indicate potential financial strain if relying solely on Social Security. Remember your social security paycheck will typically replace only about 40% of your pre-retirement income.
10. Simple Social Life
Your lifestyle preferences can significantly impact how manageable it is to survive on a Social Security check. If you’re someone who doesn’t spend a lot on social activities or entertainment, it becomes easier to live within the constraints of a fixed income like Social Security. Simplifying your social life and cutting down on discretionary spending can make it more feasible to manage on a lower income.
11. Willingness to Get a Housemate
Sharing living expenses by having a roommate or housemate is a smart way for retirees to cut down on their living costs. Financial planners often suggest considering this option as it significantly reduces housing expenses.
12. Having Well-off Children
While relying solely on children for financial support isn’t advisable, having supportive and financially stable children can minimize some financial stress. If your children are in a position to offer assistance, it can make it easier to live off your Social Security paycheck. However, depending entirely on children for financial support isn’t a reliable strategy for retirement.
13. Experience with Economic Hardships
Economic conditions can influence the stability of Social Security benefits in the long run. Although the system is designed to endure, unforeseen economic shifts or policy changes can impact the adequacy of future benefits. Considering alternative income sources, like investments that offer potential growth or income, can serve as a safety net against economic uncertainties. People who have experienced hard economic times have higher chances of living off their social security paycheck.
14. Limited Travel
Those who don’t travel frequently can find it easier to live within the confines of a Social Security paycheck. Travel expenses can significantly impact a budget, so limiting travel can help in managing expenses and ensuring that the fixed income covers daily living costs.
15. Love for Cooking
Enjoying cooking can be financially beneficial for someone living on a Social Security check. By cooking meals at home instead of eating out, individuals can save a considerable amount of money. It’s a way to control food expenses and live more economically.
Frugal Living Tips: The Essential Guide To Start Saving Money
People who live frugally aren’t necessarily cheap, they just try to make their dollars stretch as far as possible. Living frugal doesn’t mean that you can’t go out to eat, buy your daily latte, or go out with friends on the weekend.
Read More: Frugal Living Tips: The Essential Guide To Start Saving Money
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If you’ve enjoyed reading our content and are passionate about learning wealth, managing your finances, and achieving financial freedom, we’d love for you to join our community! Click here to follow Invested Wallet for more.