Living on a Fixed Income in Retirement

By on October 22, 2020
fixed income

Approximately 40% of retirees live on social security. This can make it difficult to sustain a good quality of life. Thankfully, there are ways to supplement your fixed income and reduce your overhead expenses. 

Investing in Retirement

If you’re currently in the fifty-something club, you have ten years or more to create a nest egg. While working, it’s essential to tuck away a portion of your salary. Open an individual 401k or a Roth IRA and contribute the maximum amount possible. 

Eliminating Debt

Excessive amounts of debt can consume a good portion of your income. In retirement, especially when you rely on social security as your sole source of income, this can prevent you from enjoying a good quality of life. Begin the process now of paying down debt. If you have many credit cards with high balances, open a new card that allows for a balance transfer. This will eliminate accruing interest and make it easier to pay off the balance quickly.

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Health Check-Up

Prior to retirement, it’s in your best interest to get your health in check. Many people pay a small amount towards their health insurance when they have a policy through their employer. Once you leave the job, it’s up to you to secure your own health insurance. If you have existing health issues, you may not have the money to receive proper treatment. Acquiring healthcare quotes for early retirees not yet eligible for Medicare is important. If you retire earlier than your proposed retirement year, shopping around can save you money.

Funding Your Retirement

If you are very close to your retirement age and don’t have even a few years to create a nest egg, you can work part-time. Many stores and businesses are on the hunt, especially around the holidays, for extra help. If you prefer not to leave the home, you can find real jobs such as a freelance writer, an editor, a tutor, or a consultant. If you are good with your hands or enjoy doing crafts, you can make products and sell them on sites like eBay and Etsy. 

Deciding Whether to Sell Your Home

If you own a home, selling it will give you a large sum of money that you can use to supplement retirement. There are pros and cons to selling your home and you should weigh them carefully. For instance, while selling your home will give you a sizable sum of money, you will need to find another place to live. There’s also no guarantee that your home will sell quickly or that you’ll get the amount you desire. On the flip side, staying in a home without a mortgage lowers overhead expenses. 

Discounts for Seniors

You can experience a good quality of life on a fixed income by finding ways to save money on everything. First, make certain that you are getting all of the discounts that are available to seniors. Homeowners and auto insurance can reduce your annual premium by up to 10 percent. When dining out, ask if they offer a senior discount and check with local establishments to see if they extend discounts to seniors. Signing up for AARP can enhance your savings on things like hotels, car rentals, airline flights, and dental and eyewear. 

Saving on Monthly Expenses

When every penny counts, it’s important to find ways to reduce monthly expenses. Bundling services such as cable, cell phones, and insurance can reduce monthly payments by as much as 20 percent. Smart technology offers a way to lower overhead costs. Installing a new energy-efficient thermostat and auto lighting will reduce energy consumption.

If you’re nearing the retirement age, it’s time to get your finances in order to ensure that you sustain the same quality of life you enjoy today.

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Living on a Fixed Income in Retirement