6 New Expenses You’ll Need To Cut If Social Security Runs Out
The Social Security Board of Trustees projects that, beginning in 2035, taxes will only be able to cover 83% of scheduled retirement benefits. While this is one year later than was projected last year, the outlook for retirees to receive full benefits remains grim.
Unfortunately, this may be a sign for retirees to start cutting back if they can no longer rely on their full Social Security benefit payment during retirement.
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According to the Social Security Administration, the average monthly benefit for June 2024 was $1,781.07. For many people, it can be challenging to live on this amount, particularly in areas with a high cost of living. Even a small reduction can be catastrophic for a retiree living on a tight budget. If Social Security does run out or is even decreased, as is currently projected, you will want to determine what expenses you can cut.
Here are six new expenses you’ll need to consider clipping when benefits run out.
Dining Out
For some retirees, their days standing behind a hot stove are long gone. Without a house full of hungry mouths to feed, seniors eat out often.
A 2022 survey found that 33% of people aged 65 and older ate out at a restaurant once a week or more. Dining out frequently, however, costs you. For a retiree with reduced Social Security benefits, the convenience of restaurant dining isn’t worth the large price tag.
The good news is that many restaurants offer senior discounts or early bird specials. It’s always smart to shop around and get the best deal. This way, you can still indulge in eating out without breaking the bank.
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Subscriptions
Subscriptions are another cost that can be cut if you lose your Social Security benefits. Americans spend nearly $1,000 yearly on subscriptions, with an average of 4.5 paid memberships.
Without vigilance, you can spend almost $100 on monthly subscriptions you don’t need. Review your account to ensure you’re not paying for something you rarely use.
Storage Costs
While downsizing is quite common for retirees, so is renting a storage unit. As reported by Building Design + Construction, boomers accounted for 22% of self-storage renters.
Depending on the size of the storage unit, it can cost anywhere from $25 to $500 monthly. Retirees must carefully consider whether the cost of storage is worth it.
Entertainment
For retirees who keep an active social life, a Social Security benefits reduction may require cutting back on discretionary spending. To determine how much money you’ll need during retirement, speak with a qualified financial advisor. If your spending regularly outpaces your income, set a budget. Once a budget has been discussed, you may need to cut non-essentials like entertainment.
Seniors with limited income shouldn’t feel hampered by their lack of funds. Many cities offer extensive senior services, including rides to and from local attractions and free events.
Taking advantage of free or low-cost entertainment helps you remain active during retirement without paying a ton.
Higher Insurance
Shop around every six months to a year to receive better insurance rates. Many retirees are surprised they’re overpaying for insurance either by failing to take advantage of discounts or carrying more insurance than needed.
For instance, you may have an extensive coverage auto policy to cover you in case of an accident during your long commute to and from work. Once you’re retired, you may not need the same amount of coverage or can reduce your mileage for a significant reduction in premium.
Overpriced Travel
Travel is commonly listed as a top priority for seniors looking to retire. Tragically, travel, even within the United States, is extremely expensive and cost-prohibitive for most people.
Retirees hoping to travel on a budget are encouraged to seek deals from senior specials to lower-cost destinations.
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This article originally appeared on GOBankingRates.com: 6 New Expenses You’ll Need To Cut If Social Security Runs Out
