Without Social Security benefits, a large number of seniors would be living well below the poverty level. Although it was never meant to be a main source of income, more than 90% of people over 65 receive Social Security benefits, and nearly one in five married retirees and one in two unmarried retirees rely on it for the bulk of their income.
If you take your Social Security benefit at age 62 in 2014, your average monthly benefit will be around $1,992, which won’t keep you above the federal poverty line.
The fact that Americans are living longer by paying more for their health, combined with our horrible national savings rate have made retirees quite dependent on public resources. Many don’t have the financial security or patience to wait on claiming their benefits, and end up taking them early.
With more than 70% of retirees needing long-term health care that won’t be covered by Medicare, many seniors are depending on their Social Security benefits to help them cover their health costs as well.
With many seniors cashing out early, Dan Katan a CFP from Minneaopolis Minn., has come up with four ways to stretch a Social Security benefits based income.
- Reevaluate Your Healthcare Plan
During the annual open enrollment period, which happens from Oct.-Dec., make sure to examine your Medicare plan. Your health and financial situations change, and since plans change annually in terms of what they cover, it’s important to make sure that your plan works for you. Figure out when most of your Medicare expenses hit, and make sure to account for that in your budgeting.
- Maintain/ Improve Your Credit Scores
By maintaining or improving your credit score, you avoid paying higher interest rates on large purchases.
- Apply For Money-Saving Assistance Programs
Depending on your income, you may qualify for supplemental nutritional assistance programs such as food stamps.
If the cost of living is cutting into your income, think about relocating to a more affordable city.
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|Kenneth G. Marks has been practicing personal injury law since he was admitted to the California Bar in 1981. www.KmarksLaw.com|