According to a nationwide survey, one in five Baby Boomers or older retirees has no second income source other than Social Security. That can result in debt-related problems or their financial dependence on their children, which can impact their children’s ability to save for his or her future.
If you think you are sailing in the same boat and can’t manage your finances for your retirement, check these pointers to cope with the situation.
How much will Social Security cover in retirement?
According to the Social Security Administration, the Social Security program was designed to replace 40% of the average worker’s pre-retirement income. Social Security may cover more or less than this percentage for you, but it will not completely fund your retirement.
The nationwide survey stated that the average retiree got $1,380/month from Social Security, which is $16,560/year. From the Bureau of Labor Statistics data, we know that the average household driven by an adult age 65 or older spends a little more than $50,000/year on an average; that means a $1,380 monthly Social Security benefit will not be able to cover 100% of their household expenses.
It might end up covering a little more than one-third of your expenses when you spend a little less than $50,000 per year, but it is not a good idea to depend on Social Security alone. If you’re struggling to manage your finances, and you don’t have any other source of income, here are a few tips:
Do not forget to get the maximum from your Social Security.
If you are delaying your Social Security program, you are reducing the number of checks unknowingly. You are reducing your benefits and increasing the size of checks until you reach your maximum Social Security benefit at age 70. This advice may not fit your situation if you’re already claiming your Social Security benefits.
But there are many more ways to maximize your Social Security benefits, like including your spouse in your plan and making sure that they are claiming benefits. It doesn’t matter if your spouse worked or not, you can still claim a spousal benefit on your work record if you are getting Social Security benefits.
You can also become eligible for Supplement Security income if your income is very low. This will give you additional money each month to cover some of your expenses. You can go to your local Social Security office or go online to apply for these benefits.
Do some research on other types of financial assistance.
Look for other government programs that may help you pay for food, energy bills, and medical expenses. These programs differ from location to location and have their eligibility criteria.
Do some research on other types of financial assistance programs for seniors or low-income workers to check if you are eligible for signup or not. This can help you to increase your funds a little further.
Look for a job.
If you have tried all options and nothing works out for you, you can try returning to work, perhaps even part-time, to increase your funding from your Social Security. You may change your work area and choose something that interests you, or you can start your own business.
You can also look for some upfront work and get some passive income source at the same time. You may rent out property or start some online courses or ebooks. Think about things that you like and would love to work on and then look for ways to evolve and turn it into a source of income.
Things may look complicated if you’re already retired and are struggling with your finances. But this isn’t the end of the world, and you still have options. Try your luck and implement some of our suggestions to see what kinds of suggestions work best for you.