6 Signs Your Social Security Check Will Be Enough To Live On
The question of when to claim Social Security often becomes whether or not the payments will be enough for you in retirement. Even with cost-of-living adjustments to deal with inflation, many find their expected income may come up short.
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So, as you near full retirement age, you may wonder whether you can live off your Social Security check alone. Monthly benefit amounts are a relatively modest source of income, and can be difficult to live off if you are not disciplined.
You can estimate your Social Security benefits using the Social Security Administration’s Quick Calculator. This will give you an idea of how much you can expect to receive each month depending on when you claim.
If your Social Security check is less than desirable, you’ll want to be sure that your lifestyle can accommodate a lower income. Before you start collecting, take the time to review your expenses and adjust your spending habits. The more prepared you are, the better off you will be in the long run. Here are six signs you can live on your Social Security check in the future.
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You Live in a Low-Cost State
Living in a low-cost state helps ensure you can live comfortably on lower-income retirement benefits and within the confines of an extremely budgeted Social Security system.
Michael Hammelburger, CEO and financial advisor for The Bottom Line Group, said, “One of the most important indicators is the number of reasonably priced housing options available in their chosen state. It’s a promising sign if the individual can locate rental properties or housing priced at a level comparable to their Social Security income.”
At GOBankingRates, we recently looked at The Cost of Living Across America and determined that the most affordable states were Alabama, Kansas, Oklahoma and Mississippi. On the other end of the spectrum, California, Hawaii and Massachusetts are three of the priciest places to live in the U.S.
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You Have Reduced Your Debt
Another key indicator that you can live off your Social Security account is if you have taken the time to reduce your debt. Carrying large amounts of debt can make it difficult to live on a smaller income. Paying off your credit cards and other unsecured debts is critical to living comfortably on Social Security.
Brian Meiggs, an entrepreneur and founder of My Millennial Guide, said, “If you have no car payment, no mortgage, no credit card balances, and no student loans, your monthly expenses will be significantly lower. This will allow your Social Security income to more easily cover basic living costs like food, utilities, and housing expenses. Having minimal debts gives you greater financial flexibility and stability when relying on Social Security.”
You Can Pay Less for Essentials
”Another indicator is the general price level of essential goods and state services. If a person’s region has relatively lower costs for things like groceries, healthcare, transportation, and utilities when compared to other regions, this indicates that the person’s Social Security income will go further in that region,” said Hammelburger. “Individuals are now able to maintain a decent standard of living without placing undue strain on their financial resources as a direct result of lower prices on commonly purchased items.”
You Are Willing To Live a More Modest Lifestyle
Learning to live on your Social Security check may involve making certain sacrifices. If you have more house than you need, you might consider downsizing, or you could opt to take public transportation instead of driving a vehicle. It is all about prioritizing your goals.
If you don’t want to work but have no other source of income outside of Social Security, you’ll need to make adjustments. These adjustments don’t have to be miserable. You might be surprised at how much you could save by not eating out or making coffee at home instead of having a barista do it.
You Are in Good Health
“If you are blessed with generally good health and do not have chronic medical issues or conditions requiring frequent doctor visits or procedures, you will avoid large healthcare costs. Not having extensive medical expenses or prescriptions to pay for out-of-pocket makes it much easier to get by on a Social Security check,” Meiggs said.
You Aren’t Afraid of a Side Hustle
Finally, if you really can’t make ends meet with only your Social Security income to rely on, you might need to be willing to take up a side hustle. A part-time job can help bridge the gap and help stretch your Social Security dollars. Plus, since you won’t need a full salary, you can be a little picky and find something that you actually enjoy doing.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 6 Signs Your Social Security Check Will Be Enough To Live On
