According to the Social Security Administration, the average retirement benefit payment was $1,756.85 in July. While this amount can already make covering expenses challenging, proposed cuts to Social Security could cause retirees to tighten their budgets even more.
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In an effort to fix the funding shortfall, policymakers have proposed steps such as increasing the full retirement age, which would further reduce benefits for those claiming early. But without changes, benefit reductions could cost a newly retired, dual-earning couple $17,400 a year in benefits, according to an estimate by the Committee for a Responsible Federal Budget.
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Whether Social Security cuts will take place is yet to be seen, but preparing now can help you find ways to stretch your benefits. Here are six ways to reduce important expenses during retirement.
1. Change Your Grocery Shopping Habits
If you currently buy groceries without a plan, you’re probably spending more than you need to. You can start by planning your meals, making a list and researching prices at local stores.
Once you find a budget-friendly store, buy items in bulk to save more money and reduce shopping trips. Stick strictly to your shopping list, and if possible, pick generics over pricier name brands. You should also take advantage of coupons and any grocery store rewards programs.
2. Cut Your Utility Costs
Decreasing your electric, gas and water consumption becomes even more important on a limited retirement income. Take simple steps such as turning off unused electronics, adjusting your thermostat and water heater temperatures and turning off faucets rather than letting the water run unnecessarily. And when you need to replace appliances, opting for environmentally friendly models can help lower utility bills.
You should also reassess your cell phone, cable and internet carriers and plans. For example, major carriers such as T-Mobile and AT&T have discounted senior phone plans. You might also decide whether your cable TV service is necessary and downgrade your plans if you don’t need all their features.
3. Downsize Your Home
While downsizing from a familiar home can be tough, it could significantly cut your monthly expenses in ways other than a lower rent or mortgage payment. A smaller place can save you on utilities and reduce the time and money spent on maintenance. You may also need less furniture and be able to sell what you no longer need.
Downsizing also provides an opportunity to move somewhere with a cheaper cost of living . You would then be better equipped to handle Social Security cuts because you can save in areas such as groceries, transportation and healthcare.
4. Buy Used Clothing
Your clothing expenses should naturally fall during retirement, especially without the need for work attire. But when you do want to add to your wardrobe, buying second-hand items can save you significantly.
You could visit local thrift and consignment stores or attend community yard sales for good finds. If you prefer convenience, check websites such as eBay and Poshmark, but be careful to verify the seller before you buy.
5. Switch to Just One Car
Multiple cars come in handy when you and your spouse work. However, Social Security cuts could make it more difficult to juggle multiple car payments and other expenses, such as insurance, gas and maintenance.
Selling one of your vehicles can free up room in your budget and make your Social Security benefits go further. You’d still have options such as walking, cycling, taking public transportation or using ridesharing services for those times when one car won’t do.
6. Reconsider Your Insurance Needs
While you’ll want to avoid being underprotected, your current insurance policies may no longer fit your needs during retirement. You may decide it’s time to increase your deductibles on insurance policies and scale back your coverage. For example, you might downgrade from full to liability-only coverage if you have an aged vehicle, or discontinue your life insurance if you now have enough money to cover your financial obligations.
For further savings, you can check for insurance discounts on auto and homeowners insurance and any bundling options. In addition, make sure you don’t have any duplicate coverages that are costing you money unnecessarily.
This article originally appeared on GOBankingRates.com : Social Security Cuts Are on the Table: 6 Ways for Retirees To Save Money on Food, Clothes and Other Necessities
