The True Costs Of Retiring On Social Security

Retiring on Social Security alone may be more difficult than you may think. With an average check being around $1404 per month, affording a lifestyle, any kind of lifestyle, may be a bit of a challenge. I see and read more and more stories about people, especially women, falling by the Social Security wayside, as they struggle to survive in a retirement based solely on Social Security.

Retirement was supposed to be funded on a three-legged stool: Social Security, a pension and interest or dividends from savings or investments. Gone are the pensions. Many retirees do not have the pension substitute which is a 401K and nearly 40% of retirees have little to no savings whatsoever.

1 in 3 Americans have less than $5,000 saved for retirement—here’s why so many people can’t save. … But overall, Northwestern Mutual found that Americans with retirement savings have an average of $84,821 saved, which is far from enough. Experts typically recommend trying to accumulate at least $1 million. (click here)

retirement success.jpg
stock photo of a successful retirement

So what’s a retiree to do if they have none of the above?

The Number 1 Rule would be to delay Social Security as much as possible. Work part time if need be. Taking SS at 62, which is the earliest anyone can take the benefit, will only set you up to a lifetime of deprivation and financial stress. You’ll be receiving 30% less than what you would have received had you waited till your full retirement age (which in some cases is 66.5 years of age). I know, I know…..but you need the money NOW. Unfortunately, that’s what I did, so don’t feel so all alone. I took my benefit at 62 because I needed the money and as the years have progressed, I’m starting to regret that decision.

Why? Because we just don’t know what the future holds for us. If I had known that my working spouse would be laid off or suffer medical setbacks, I would not have taken my benefits so early. In retrospect, that several hundred dollars more a month I would have received, if I had waited, would be coming in handy right about now. Granted, yes, we have the three-legged stool (Social Security, pension, interest from investments) but how has that been working out? The fluctuations in the stock market, roller coaster CD rates, pension variables has given us a shaky if not a rocky road for some years. In other words, I should have waited. Hubby is waiting and the added financial difference his Social Security benefit will make up for my wrong retirement decision.

The Number 2 Rule is to make sure you have low, affordable rent/mortgage/paid-for home and a strict grocery list. Throw in utilities, transportation and rising health care costs and you can see how easily difficult it might be to fund Rule #2. You may have to move to a less expensive location, an inexpensive retirement community (where most maintenance costs are covered) or another state where Social Security and pension benefits are not taxed. You may have to take in a roommate or sublet rooms. If all else fails, you may wind up like these two retirees: Glenda Sully who lives on $1200 a month Social Security who dumpster dives for her meals or Kathleen, who after 40 years of work receives $11.78 a month in a pension and under $1000 a month in Social Security. Kathleen lives in her car.

The Number 3 Rule is to retire without a smidgen of debt. Debt is the number one killer of retirements. I have charge cards that I use during the month to tide me over till I get my benefit checks. I pay my charge cards in full at the end of each month. Interest calculations, sometimes at 29.999% would do anyone in. You can’t catch up. I do have a low interest RV loan, under 5%, for only $12K or so. The difference with me is that I have the cash available to pay off this low interest loan should I befall any trouble or hardship. OR I can just sell the darn thing. I’m not underwater on it, meaning its value ($14,500) is more than the loan balance ($12,301). I do not, however, recommend this option. Buy a used RV and pay cash. Ditto for your cars. I am a big proponent of zero interest loans. Why should I use my money to buy a big ticket item (like appliances) when I can use their money instead. This method helps my cash flow bottom line. My money stays invested earning me between 3% to 5%. But then again, if trouble comes my way, I have the cash needed to pay the darn things off in full.

The Number 4 Rule is to seek out free entertainment, utilize your local library for freebies, eat in restaurants that offer senior discounts (embrace The Early Bird Specials!), fast food restaurants such as McDonald’s and Burger King offer senior discounts. Take advantage of them. Go to movie matinees and pay less to see top quality, newly released movies, sign up for RX drug prescription discounts (or buy Part D at Medicare sign up time), volunteer your time to increase your social activities.

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stock photo of happy retirees, enjoying a free bike ride

Retirement is a scary thing. I know the recommendation is for people to save at least One Million Dollars, but if you’re a middle class person, such as my husband and myself, you’d know that a savings amount like that would be near impossible. I’m fortunate that some of the houses I’ve owned paid off well when I sold. But then again, I sold one house along my financial journey at a $100,000 loss! OUCH! I recommend saving as much as is humanly possible. Try to do your best. If you can’t, then follow the rules I have listed above, adjust and accept your retirement lifestyle and know that you can still have fun, live well and enjoy your retirement years.

I’m living proof that it can be done. We just have to be creative.




  1. These are all good tips, need to know information. I feel we are on track, though we have one more kid starting college so the next four years will be minimal savings, but some none the less. I want to be in a state where I think and plan about money, but I don’t want to be stressed and depressed by it. I know I can’t live as a turtle, but at a certain point, I have to just trust we have done enough like fully funding our 401K’s, fully funding the Roth each year, not taking out loans for college for our kid, etc. I know this means we will need to get creative on everyday expenses, and I like those challenges anyway. Still, I don’t want to say no to everything, and will do so when the wow factor is worth it. I may not agree with everything I read and learn form retirees, but I value that people share their perspectives. Thanks, Cindi.


    • You’re welcome, Sam. Sounds like you are on the right track. You have a good plan in place. We all try to do our best. No one is perfect. retirement is led by the seat of our pants. You really don’t know what it is like till you are in it.
      Thank you for your comment.


  2. I live in a very economically depressed area of the U.S. but my house is paid off. I live here because it is the area where I work. However, I don’t think I will stay here and will move closer to some of my kids. That means more expensive housing but I am looking at small towns near them, rather than live in the expensive college town where they live.That should save me a good bit of money.


    • Good idea Cindy. I always thought college towns were cheaper since most students couldn’t afford much. Guess that has changed? It’s also a very good idea to be near your kids. Once of the reasons why I won’t be moving so fast myself.
      Thanks for your comment.


  3. Tuscaloosa is very expensive for Alabama. My house cost me $25,000 in 2014. It was in decent shape and it is a 912 sq ft 2 bedroom one bath house built in 1950. The same house in Tuscaloosa, depending on the neighborhood, is from $100,000 to ,$125,000. Auburn is not exactly cheap either. I have no idea why it is high but they are both higher than the small, nearby towns.

    Liked by 1 person

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