Save big on Social Security: The ONE cut you need to make now!
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As retirement approaches, managing Social Security and living expenses becomes more crucial. With rising costs and fixed benefits, it’s important to identify areas where you can save.
The GrayVine reveals the one expense you must eliminate now to boost your financial freedom.
When it comes to trimming the fat from your budget, the most effective strategy might just be reevaluating your living situation.
Housing costs are the heaviest weight on the retirement budget, gobbling up around 25% of spending for those 65 and older, according to Rand.org.
And for the 40% of older homeowners still chipping away at a mortgage, the burden is even heavier.
The median monthly housing cost for older mortgage-holders was a steep $1,470 in 2021, as reported by the American Community Survey.
Compare that to the median of $520 for those who've paid off their homes, and $940 for renters, and it's clear where the opportunity for savings lies.
The solution? Downsizing or relocating.
By moving to a smaller home or a less expensive area, you can slash or even say goodbye to mortgage payments.
This isn't just about immediate cash flow; it's about preparing for the inevitable rise in other expenses, particularly healthcare.
Fidelity's research indicates that healthcare costs nearly double for individuals between 55 and 75, and a retired couple over 65 can expect to spend around $300,000 on healthcare throughout their retirement.
Moreover, a smaller home means fewer maintenance headaches and costs.
The Society of Actuaries identifies home repairs as the most common unexpected expense for retirees. Less square footage equals less potential for costly surprises.
Downsizing isn't just about cutting costs; it's also an opportunity to boost your retirement savings.
Vanguard's research shows that those aged 60 to 69 stand to gain the most from home equity by relocating.
This unlocked equity can be a lifeline, supplementing your Social Security and providing a cushion for unforeseen expenses.
A strategic move can also reduce other significant expenses.
For instance, choosing a location with robust public transportation can eliminate the need for a car, which the American Automobile Association estimates costs over $12,000 a year to own.
That's a hefty sum for the many Americans who rely primarily on Social Security.
“Driving can become more challenging with age,” says Anna Annecca, Senior Care Expert and Clinical Operations Leader with Assured Allies.
She advises retirees to consider living in towns with easy access to reliable transportation, well-connected to major transit lines.
This not only saves money but also ensures mobility and independence as driving becomes less feasible.
If you're ready to make a change, start by assessing your current housing costs and how they align with your retirement goals. Consider the following:
1. Evaluate your need for space. Do you use all the rooms in your house? Could a smaller home suit your lifestyle just as well?
2. Research potential destinations. Look for areas with a lower cost of living, good healthcare facilities, and accessible public transportation.
3. Calculate the potential savings. Factor in the costs of moving and settling into a new place against the long-term savings.
Remember, the decision to downsize or relocate is not just about the financial benefits. It's about crafting a retirement lifestyle that's sustainable, comfortable, and leaves room for the joys of life beyond the bills.
Have you downsized or relocated in retirement? What impact has it had on your finances and quality of life? Share your thoughts and experiencesin the comments below.
The GrayVine reveals the one expense you must eliminate now to boost your financial freedom.
When it comes to trimming the fat from your budget, the most effective strategy might just be reevaluating your living situation.
Housing costs are the heaviest weight on the retirement budget, gobbling up around 25% of spending for those 65 and older, according to Rand.org.
And for the 40% of older homeowners still chipping away at a mortgage, the burden is even heavier.
Housing costs represent the biggest expense for retirees. Image source: Pexels.
The median monthly housing cost for older mortgage-holders was a steep $1,470 in 2021, as reported by the American Community Survey.
Compare that to the median of $520 for those who've paid off their homes, and $940 for renters, and it's clear where the opportunity for savings lies.
The solution? Downsizing or relocating.
By moving to a smaller home or a less expensive area, you can slash or even say goodbye to mortgage payments.
This isn't just about immediate cash flow; it's about preparing for the inevitable rise in other expenses, particularly healthcare.
Fidelity's research indicates that healthcare costs nearly double for individuals between 55 and 75, and a retired couple over 65 can expect to spend around $300,000 on healthcare throughout their retirement.
Moreover, a smaller home means fewer maintenance headaches and costs.
The Society of Actuaries identifies home repairs as the most common unexpected expense for retirees. Less square footage equals less potential for costly surprises.
Downsizing isn't just about cutting costs; it's also an opportunity to boost your retirement savings.
Vanguard's research shows that those aged 60 to 69 stand to gain the most from home equity by relocating.
This unlocked equity can be a lifeline, supplementing your Social Security and providing a cushion for unforeseen expenses.
A strategic move can also reduce other significant expenses.
For instance, choosing a location with robust public transportation can eliminate the need for a car, which the American Automobile Association estimates costs over $12,000 a year to own.
That's a hefty sum for the many Americans who rely primarily on Social Security.
“Driving can become more challenging with age,” says Anna Annecca, Senior Care Expert and Clinical Operations Leader with Assured Allies.
She advises retirees to consider living in towns with easy access to reliable transportation, well-connected to major transit lines.
This not only saves money but also ensures mobility and independence as driving becomes less feasible.
If you're ready to make a change, start by assessing your current housing costs and how they align with your retirement goals. Consider the following:
1. Evaluate your need for space. Do you use all the rooms in your house? Could a smaller home suit your lifestyle just as well?
2. Research potential destinations. Look for areas with a lower cost of living, good healthcare facilities, and accessible public transportation.
3. Calculate the potential savings. Factor in the costs of moving and settling into a new place against the long-term savings.
Remember, the decision to downsize or relocate is not just about the financial benefits. It's about crafting a retirement lifestyle that's sustainable, comfortable, and leaves room for the joys of life beyond the bills.
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