13 Budgeting Tips to Help You Survive on Social Security

 It is believed that roughly 25% of those aged 65 years and above live with families that rely on social security. For this reason, retirees who earn less than $1500 in social security must operate a very tight budget in order to meet up with their financial responsibilities. The following are some of the measures you can put in place in order to stretch your social security and meet your financial obligations;

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Try to delay taking your social security

Though you should start collecting your social security at the age of 62, your monthly social security benefits will get higher if you can just wait for a little till your retirement age to start collecting the money. If for instance, you start collecting your social security at 62 when your retirement age is 67, your social security benefits will be reduced by 30%. Learn more about this from Navigation Wealth Management experts.

Consider moving to an area with lower costs of living

You can maximize your social security benefits when you reduce the costs of your living. Do not hesitate to move to a city or town with lower costs of living when you retire.

Try and pay off your debts before retiring

Credit card bills and mortgages are some of the biggest debts that can deplete your social security funds. Try as much as possible to repay them before you retire.

Consider moving to a more tax-friendly state

Many states, including the Washington DC, do not tax social security benefits. Living in states that do not tax social security will help you stretch your benefit further to cover your daily expenses.

Join discount membership programs

There are some fantastic discount membership programs you should consider joining if you want to get more from your social security. The AARP membership, for instance, will provide you with discounts or savings on your health expenses, entertainment, shopping, and restaurant meals. There are some other community memberships you can find that provide discounts for seniors.

Request from senior discounts when you make travel bookings

As a senior citizen on social security, you will have more time to travel but flights and hotels can be incredibly expensive. You can save more money off your social security by simply taking advantage of discounts on airlines such as Southwest Airlines, and American airlines. There are several hotel chains around the world that also offer discounts to senior citizens worldwide.

Make sure you don’t overpay for prescriptions

The costs of medications can quickly add up and you should consider choosing the generic payment options if possible if you want to save money on such medications. You may want to join a prescription membership program to receive rewards such as discounts.       

Volunteer or get a senior job

If you do not have a health challenge that will reduce your mobility, it will be ideal to become a volunteer or get a non-physically demanding job. Volunteering is a good way to spend your free time, even if you don’t get financial rewards for such.

Avoid adding new debts

If you cannot pay off all debt before you retire, then you should avoid adding new debt, if you want to maximize your social security benefits. You should consider steering clear of whatever that causes impulse buying and practice self-control so that you can stick to your budget. It is disheartening to know that many people are still entangled in debts even after retirement, this eventually makes it almost impossible to save money off their social security.

Downsize to a smaller home

One of the best ways to save money while living on social security is to sell your home and move into a smaller one. Fortunately, home values increase over time and you should take this opportunity to sell that family home and move into a smaller home that will cost much less to maintain. Moving into a smaller home does not mean you have to give up on your comfort, you just want to give up the unnecessary free spaces and reduce the costs of maintaining such large homes. If you don’t want to move out of your large home, you may want to consider renting out a room or apartment from the home, to save more on your social security. Having a roommate will help you save costs of utilities, including electricity, water, and cable.

Consider online income opportunities

If you have not considered online money-making opportunities before, this could be the ideal time to do so. Online income opportunities such as freelance writing, data entry, and survey participation can give you a few hundreds of dollars to augment your social security.

Make use of restaurants that offer discounts to seniors

It is okay to eat out at restaurants once in a while, even though you want to be frugal with your living expenses when you are on social security. There are numerous restaurant chains that offer up to 25% for seniors, on all types of foods and drinks. There are some restaurants that offer free meals to seniors on a particular day of the week or month.

Make use of free entertainment advantages

You don’t have to spend part of your social security to have fun and be entertained. There are museums and movie places where seniors can enter for free at a certain time of the day. Your local theater or coffee shop may organize open mic shows that you can attend for free. Book readings, free outdoor activities and free lectures at local colleges, are some of the free entertainment and educational opportunities you should take advantage of.

Conclusion

Living a frugal lifestyle perhaps is the most important skill you should embrace when living on social security. Cutting costs can be very inconvenient for many, but the rewards can be very enticing. You may want to take advantage of free evening schools for seniors in local colleges and universities where you can learn a new skill you can apply outside of the school to make extra income and live comfortably with your social security.

Ways you can fund your new business venture in retirement

Retirement doesn’t mean stopping.

In fact, many retirees are considering continuing working after they retire, and this may well include the formation of a business. It’s a challenge, but to some it is preferable to spending days relaxing.

This article isn’t about whether or not a retiree should start a business. Instead, we’re going to focus on how you can gain funds to help start a business in retirement.

This is probably one of the ‘fears’ that prevents people in this stage in their life from taking the plunge. However, it is possible to get some money in place to start and maintain a profitable business after retirement.

We’ll take a look at several of them.

Ways you can fund your new business venture in retirement

Downsizing

A relatively new term, ‘downsizing’ allows you to release money in the sale of your property. Normally, downsizing means moving to a new, smaller property, and enjoying the equity you’ve released alongside that.

This is an interesting situation, because downsizing does indeed release funds through selling. However, you obviously have to live somewhere, so much of the downsizing profit may be spent on living expenses.

There may, however, be some money there afterwards that can be spent on pulling together your business. It is again a good idea to sit with a finance professional who will be able to tell you, realistically, what you can expect to gain from downsizing, and whether the amount of money will cover business expenses.

Spending the kids inheritance

This has become a growing trend in recent years. Rather than spend money on the future of their children,some retirees opt instead to spend it on themselves.

This has become more popular as people live longer. Money that has been saved up or has reaped returns on investment is simply used by the parents for other purchases. And these purchases are all about the parents, not the kids.

Using this money to start up a business is perhaps something new. The whole point of spending the inheritance is to enable a better standard of life. Many retirees take that money and go on a long holiday, for example. However, it is possible to use it to fund a business.

Whether that fits in well with a retiree’s own views on what they want from life is up to them. But if it is a large sum (and most parents now save up a lot for their future generations) it can be used very effectively to develop a business. For example, it is accepted wisdom that you shouldn’t start a business without ‘buffer money’. Buffer money is money you have ready for the first six months of the business.

Business can be challenging. If you are able to gather a good sum of money to protect against the ups and downs of business for those vital first few months, you’re in a great position. Of course, this option is appealing because you have more control over how the money is spent. If you just want to use a small amount of the money to fund one key aspect of starting a business, that is entirely up to you.

Equity release

Equity release is a situation where the borrower can take out an equity release contract, which releases money that is equal to up to 60% of the value of your home.

This can mean you can take on a potentially large amount of money very quickly. There are a couple of options in equity release that you can take advantage of. This is encapsulated in two products available to you, the borrower:

  • The lifetime mortgage. This allows you to take money out against the value of the property.You have to be at least 55 years old to do this. One key aspect that makes this option an attractive one is the option to pay off all the interest, some or even none of the interest before the mortgage ceases. It ceases when you have to enter care, or you die. Another key aspect is you not having to take out the full amount. And you only pay interest on the amount you withdraw.
  • The home reversion. This is a little more complicated than the lifetime mortgage. You can sell all or part of your property to a specialist home reversion company. You no longer own that whole or part of the property. However, you do have the right to remain in the property until you die or move onto long-term care.

If your business is dynamic

By ‘dynamic’ we mean looking like it’s going to grow quickly. If it is looking this way, then consider seeking investment.Bear in mind that not all investment runs into the hundreds of thousands. Some investors can pump money into a business for a small slice of profits, and they are much more likely to do this if you have an idea for a business that looks like it will grow quickly.

It’s worth considering seeking investment,simply because it allows you to have that early head start, without having to find money from more traditional lenders. Obviously it relies upon you having a strong idea that will make money for investors. But if you do, the power investment can bring is considerable.

Your choice

Many retirees look for funding from banks and their home value. Whatever you do, bear in mind that for the first six months of your business, you will have to work incredibly hard to make sure money is handled wisely, and your business gets your complete focus. Using some of the methods in this article to gain finance can help you on your way to running your ideal business in retirement.

Financing Home Renovations For A Better Retirement

Couples nearing retirement may be considering upping sticks and relocating to be closer to family or to explore a new country. According to a Merrill Lynch study, 64% of retirees move home during retirement. Therefore, increasing your property’s value in the years leading up to your retirement is the perfect way to ensure a good return when the time comes to sell. Everyone knows that preparing for your retirement is essential, so if you’re one of the ones looking to move home, what are your finance options?

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Remortgage your home

One of the easiest and quickest ways to free up some cash in order to get a kitchen installation, undertake a loft conversion or add an additional bedroom to your home is to remortgage your property. This means borrowing a sum larger than your existing mortgage so that you can use the additional funds to complete your renovations. Once you’ve retired and have bought a new home, you might be wanting to complete home improvements on that too. Taking out a reverse mortgage can be an ideal solution for those aged 62 or over who are looking to free up some spare cash.

 Take in a lodger

As a couple nearing retirement age it’s likely that your children have moved on and in their place are large empty bedrooms, gathering dust. Taking in a lodger is the ideal way of increasing your bank balance each month. Most lodgers are very little hassle and choose to spend most of their time in their rooms, so you’ll barely notice the additional body in your home. The extra income will be a welcome bonus, too. Just remember to make any potential lodger aware of the renovations you’re planning.

Turn your home into a business

If you’re after something a little more lucrative than a lodger, consider transforming your home into a bed and breakfast. American B&Bs can be very profitable businesses with the average daily rate being $150 and average revenue per room hitting $58. When you decide it’s time to retire, you’ll have two valuable products to sell; your home and your business, which can result in a nice return for you to rely on during your retirement.

Invest your savings

You’re probably keeping your savings back to use once you retire. However, investing them to boost the value of your home is a great way of seeing a larger profit when you decide to sell up and retire. It’s not advisable to splurge all your savings on your project, but, taking a chunk of them to cover the cost of the work and to, ultimately, increase the value of your home is a practical way of financing your home renovations.

Finding suitable ways to finance home renovations when you plan on moving home during your retirement is the perfect way to ensure it’s a prosperous and healthy one.

The Ages Of Money, And How To Be Financially Secure In Every One

Good financial sense is an essential as we go through the stages of life, although many of us don’t realize this until we have arrived in each one and by then it is too late! With this in mind, get ahead of the game by reading the guide below.

0-20 years

Most folks don’t think too much about the fact that what they spend at this point in their life can affect the rest of it. However, some frugality and sensible investing now can set you up for financial stability.

That means if you are just getting your first part-time job, or your initial job after education it makes sense to save as much as you can. Then you can invest it in long-term assets on the stock market, and it could make you very wealthy by the tender age of 30.

Invest when you are young to be secure throughout life

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20-30 years

These are the years that most folks are concerned with getting their first lot of big-ticket items such as cars and houses. It’s also usually when they choose to settle down and consider having a family. That means there can be a lot of demand on your finances at this time.

With this in mind, it’s a good idea to open a  saving account and create a fund that will allow you to pay for any financial difficulties that so come your way, rather than living right up to your limit all of the time. The reason being that it can be very stressful when life changes do occur, something that is quite likely during this period.

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30-40 years

This period of time is when it’s best to start thinking about your retirement. OK, so it’s quite a way off yet, but getting reliable retirement advice you can trust now can help you build a fund for the future that will allow you to live comfortably. Choose to ignore this and wait until later on, you will find you have to save a lot harder and pay more into any pensions to get anywhere near what you could earn if you do it in your 30’s!

40-50 years

With any luck, some of your previous financial investments are starting to pay off during the time between your 40s and 50s. This means you may find yourself in a position to invest in some luxuries and more of the finer things in life. This is, of course very enjoyable.

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However, you must also remember not to get carried away with this sort of lifestyle. That means ensuring you have reinvested at least a portion of the revenue you have earned to provide for your future financial security in later life and during retirement.

50-60 years

In you 50’s it like you are most focused on retirement, you may even choose to take early, or part-time retirement to focus on other things in life that you enjoy.

If this is the case, then be sure that you keep a firm hold of your expenses and use only the portion of your resources you can afford to pay for this change in lifestyle. Otherwise, you risk financial instability later on in life. A time where you could possibly need it the most due to the increased likelihood of medical costs and care.

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Alternative Ways To Prepare For Retirement

Securing your finances before you retire is incredibly important. If you finish work and you don’t have enough cash backed up, you’re going to struggle and you won’t be able to enjoy your later years. The obvious way to set yourself up for retirement is saving and putting into a pension. The thing is, that doesn’t actually work for a lot of people. More of us are finding that we just don’t have enough to get by on when we retire, regardless of how much you’ve been trying to save. The problem is made worse because there is too much of a focus on saving and not enough information on all of the other alternatives. If you’re worried that saving might not be enough, try some of these alternatives instead.

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Clear Debts

Even if you’ve saved a healthy amount of money, it won’t be enough if you’re plunging half of it into debt repayments. You’ll soon eat through your nest egg and be left with nothing. People often neglect debts in later life because they’re trying to put their money into savings instead. I can see the logic but there’s no point saving money that you’re just going to have to spend later. While you’ve got the money coming in, clear off those debts before you start looking into savings options.

Investing In Gold

When you’re trying to make the most of your money, investments are better than just putting it into a savings account. Instead of seeing small growth from interest, you’ll see a bigger return on those investments. There are plenty of places you can put your money but a lot of them are quite risky. IRA’s are a popular choice for retirement funds everywhere but they put your money into stocks and shares. You can see a good return on that but it’s also susceptible to market fluctuations. A good alternative is a gold-backed ira because it’s far less volatile. If the market crashes, you don’t risk losing any of your money. There are obviously going to be price fluctuations in the gold market but they won’t be anywhere near as drastic as the stock market.

Move To A Cheaper Area

When you’re really struggling to save up money for retirement you should think about the area that you live in. If the cost of living is incredibly high, you might not be able to afford to stay there with the money that you’ve saved. However, if you moved to a new neighborhood with a lower cost of living, you might find that it can sustain you. People don’t usually like this idea because they think it means living in a bad area, but you don’t have to downgrade that much. It’s worth living in a slightly smaller house if it means you can go on more vacations.

Trying to save money where you can is still a good way to prepare for retirement, but you should start as early as possible. Just remember not to rely on those savings alone, try some of these alternatives as well.