How to Budget as a Senior with a Fixed Income

How to Budget as a Senior with a Fixed Income

You might think that seniors fear death above all else. In fact, one of the biggest worries that older persons have as they age is running out of money during their retirement. It’s an understandable concern since you will no longer have a steady source of income during this phase of your life. However, you can offset these fears by taking some practical steps in terms of your expenditures as you get older. With some preparation and tweaks to your monthly budget, you will be able to maintain oversight of your money as you age and ensure that you don’t run out of funds. Find out how to do it below.

Create a Monthly Budget

A monthly budget allows you to see how much you have coming in from, for instance, Social Security benefits or retirement funds, and how much you have going out every month. This guide from the Balance takes you through the steps of creating a senior-friendly budget. For instance, you start by gathering our financial statements and then go on to break expenses into two categories: fixed versus variable. Once you get an idea of where your cash is being funneled, you can make adjustments. You might be surprised by how much of your money is going toward needless expenses like cell phone plans or restaurant bills.

Switch to a Medicare Advantage Plan

Medicare provides you with financial coverage for health expenses in your later years. You can have a traditional plan or an Advantage plan. Switching to the latter has many benefits; for instance, many prescription costs will be covered, as will hearing and sight services. This informational site from the United States government, which sponsors Medicare, provides details on the benefits and how you can make the transition.

Check Your Other Insurance Plans

Health insurance isn’t the only type of coverage you have. For example, you might also be able to save some money on your auto insurance. So, check your current coverage, and ask your provider about ways you can pinch pennies. You may qualify for discounted rates if, for example, you have a clean driving record. You can also save by bundling policies, installing an anti-theft device in your vehicle, and driving less than a set number of miles each year. Every state requires minimum coverage, but you may no longer need full coverage. Shop around and get quotes from different companies before renewing your current contract.

Don’t Collect Social Security Benefits Yet

Social Security is a government fund you pay into to help provide cash for retirement in later years. While you can collect on your social security benefits now, it makes sense to wait until later in your retirement (at least until age 70) as this will mean more money in the big picture. This will result in monthly payments as much as 32 percent more than what you would have been able to claim at age 66. What’s more, Social Security benefits have increased in recent years, meaning even more money in your pocket.

These guidelines can serve as the basis for a financially secure retirement, offering you peace of mind as you make the most of your golden years. Implement them now to avoid needless stress in the future. Taking care of your finances in advance also allows you to save more time for those elements of retirement that aren’t related to money but proven to foster mental well-being, like fostering relationships with loved ones.

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