What It’s Like Living on Social Security
No doubt you’ve heard politicians and pundits debating the state of Social Security, and throwing out all kinds of numbers. But the bottom line for retirees has always been simple: Will I get enough to live on? Barbara Woodruff, of St. Louis, can answer yes to that question — but just barely. “It’s very difficult living on Social Security.” says the 65-year old, who retired when she turned 62.
According to the Social Security Administration, Woodruff is far from alone. Nine out of 10 Americans 65 and older receive Social Security Benefits, and it’s often their primary source of income. Social Security was at least 50 percent of income for 52 percent of beneficiary couples and 74 percent of single beneficiaries, and at least 90 percent of income for 22 percent of couples and 45 percent of singles.
Living on a Social Security Benefit
The average Social Security benefit is $1,294 a month, almost twice as much as Woodruff’s. Her low benefit reflects years of not working due to health problems — Social Security benefits are based on your earnings during your working years. Yet Woodruff has figured out how to live on $633 a month.
Qualifying for subsidized housing is a significant help. “I pay $189 for a really nice one-bedroom apartment,” Woodruff says — and $33 a month in food stamps helps defray her grocery bills. Besides that, Woodruff pays $45 a month for cell phone service (she feels safer having a cell phone with her), $45 on a senior-discounted bus pass, and $35 on Internet service. The rest of her income goes mainly to medication for thyroid and cholesterol issues, food (she tries to stay healthy by eating fresh fruit and vegetables) and an emergency fund. “I’m very frugal,” says Woodruff.
Woodruff’s $633 monthly benefit is tight, but even someone who receives the average monthly benefit of $1,294 would need some type of financial assistance to get by. According to the advocacy group Wider Opportunities For Women, the monthly expenses for Americans 65 or older in 2013 totaled $1,645 for a single person living in their own house without a mortgage, $1,966 for a renter, and $2,481 for a single person with a mortgage. This includes housing, food, transportation, healthcare and miscellaneous expenses. For couples, it was $2,542, $2,863 and $3,378, respectively.
Fixed Income Must-Do
Health issues and medical expenses are the top worry for retirees, according to a recent Merrill Lynch survey. And for good reason: medical Medical costs rank among the top three retiree expenses, after housing and transportation, according to the Social Security Administration. And as we all know, it can be unpredictable.
That’s why Paul Merritt, principal at NTrust Wealth Management in Virginia Beach, Va., recommends really spending the time to shop for the best prescription drug plan and supplemental Medicare coverage for you.
If it’s all too confusing, contact your state’s Senior Health Insurance Program, or SHIP, says Merritt. Set up an appointment and they will help go over all your options.