The only things in life that are certain are death, taxes, and continual increases in the standards of living. Even for senior citizens. People over the age of 65, and those entering retirement, need at $40,000 a year to meet their standard of living expenses. The cost of living in certain American cities can easily exceed that amount. What’s more, because most senior citizens live on fixed incomes, it may become more difficult for them to meet these expenses as they age.
Most people think that senior citizens and retirees travel the world or spend money on extravagant personal hobbies. The truth is that most senior citizens are wholly unprepared for their post-retirement age expenses. Less than 30% of Americans have a pension plan. Over 35% of American workers have less than $1,000 saved.
The issue of senior citizen finances becomes more serious when you consider that most live on fixed incomes. The average annual salary for people between the ages of 65 to 74 is less than $19,000. Social security benefits only pay about $16,000. The average pension plan pays about $15,000 a year. While many senior citizens may be able to augment their income from numerous sources, the ever-rising standards of living can mitigate those gains.
What follows is a list of ideas on how seniors can save on their monthly expenses. It helps for senior citizens to accept that as they get older, it just becomes more unrealistic for them to financially maintain non-essential expenses. Before we get into some budget saving tips, let’s take a look at the average senior citizen budget.
The Senior Citizen Budget
Just like a young or middle-aged person, a senior citizen has a variety of expenses that they must contend with every month. The average mortgage payment is about $1,200. However, with home insurance, utilities, bills, food, transportation, and various other expenses, additional monthly home expenses can be double or triple the mortgage payment.
The average retired couple can expect to pay at least $280,000 for continuing medical expenses for the rest of their lives. There are always expenses for living at any age. Yet, there are ways to manage.
As we age past 65, the human body and mind breaks down slowly and steadily. It just becomes harder and harder to physically care for and maintain a home in your 70s and 80s. Seniors can free up a lot of income by downsizing their lives. Like selling a home, their amassed belongings, and moving into a smaller home or an apartment. Most senior citizens become unable to drive as they age. Sell the car or take up carpooling with friends. No one pretends that this will be an easy thing to do. Yet, downsizing is a very effective way to mitigate monthly expenses.
Almost every imaginable business, entertainment venue, transportation system, national park, and more, offer some kind of senior citizen discount or pass. Ask if a senior citizen discount is available whenever you shop, especially at supermarkets and pharmacies. You can save a significant percentage against full price or tens of dollars per transaction.
There are several different types of life insurance for seniors. However, burial insurance is a very basic form of life insurance that is expressly designed to pay for all funeral expenses. You can apply over the phone, there is usually no medical exam required, and most seniors are approved within hours or days. The average burial insurance coverage is about $20,000 to $25,000, which is also the average cost of a funeral.
A basic burial insurance policy could negate the need to pay for more expensive life insurance policies. This would be a great way to save money if you don’t have any.
Assess Nonessential Expenses
As you get older, the best way to cut down on monthly expenses is to be honest about non-essential expenses. Also, the ravages of age just make it impractical to continue with some expenses. The ability to live doesn’t end past age 65, but there is no reason why it must be more expensive than it has to be.