Showing posts with label social security income. Show all posts
Showing posts with label social security income. Show all posts

Friday, April 13, 2018

5 Things to Know about Social Security Income

Just over 71 percent of all unmarried seniors receive at least half of their income from Social Security. The financial assistance that this program provides is extremely important to many people, and that is why all future beneficiaries need to spend some time familiarizing themselves with this system. 

Here is a look at five facts that every retiree should know about Social Security and Social Security Disability benefits.

You Won’t Receive Benefits Automatically

Many employees believe that they will begin receiving benefits as soon as they hit a certain age, but that is no longer true. Everyone must file an official application with the Social Security Administration in person, online, or over the phone. 

Luckily, your application can be filed a few months in advance so that you have ample time to take care of any problems.

You Can Receive Benefits Starting at Age 62

Even though you can apply for Social Security at the age of 62, you might want to wait until you are at least 66. Delaying your Social Security by just a few years could increase your monthly benefits by hundreds of dollars. 

It might be tempting to apply as soon as possible, but those who are financially secure should consider delaying their application.

Beneficiaries Can Continue to Work

Just because you are receiving Social Security doesn’t mean that you need to stop working. Some beneficiaries continue to work so that they can pay off high-interest loans with the additional income. 

Before you apply for Social Security, you must take a close look at your finances to see if it is the right decision.

Your Benefits Might Be Taxed

Unfortunately, you may end up paying taxes on your Social Security benefits if you are in a certain tax bracket. As a general rule, your benefits will be taxed if you are a single individual who is receiving more than $25,000 from all sources of income. 

Couples are taxed if their joint annual income is over $32,000 a year.

SSDI Isn’t the Same as Social Security

If you are injured or impaired in any way, then you might be eligible for Social Security Disability benefits before the age of 62. Employees who have been severely injured or impaired in any way should contact a social security disability attorney to learn more about their options. 

SSDI income can help with additional expenses such as medical bills, medications, and physical therapy.

With a little extra planning and some research, you won’t have to worry about any hiccups with your Social Security benefits. 

Those who wait until the last minute to file for Social Security could end up dealing with a wide variety of problems that make it difficult to cover their monthly bills.

Wednesday, June 5, 2013

How to Live Comfortably on a Fixed Retirement Income

When you're working, it's relatively easy to put in some extra overtime to boost your earnings. After you retire, however, you have to adjust to living on a fixed income; that means freeing up room in your budget so that you have cash in the bank for when something unexpected happens. You don't have to suffer through your retirement, but practicing a little frugality will help you build a financial cushion for unexpected expenses.  

Dine In

On average, Americans spend nearly half their budget on food. One of the best ways to cut your expenses is to cook more at home. Take advantage of having more time in your schedule and spend some time exploring new recipes, you may even find that you enjoy cooking more than you thought. You don't have to live on Ramen noodles, but be reasonable about your food budget and mix-up "treat" nights where you may have something more expensive like steak with other nights where you have less expensive meals like pasta. Try to plan your weekly meals in advance so that you don't overspend when you go to the grocery store. 

Give Up Your Landline

Many retirees like the security of having traditional telephone at home and a cell phone for when they are on the road. While that is a nice luxury, it also means you have two phone bills to pay every month. Since long distance doesn't cost extra and the majority of cell phone plans offer adequate minutes for a reasonable price, many people are opting to have their cell phone as their only phone. Another nice safety feature of cell phones is that even if you are out of minutes on your prepaid plan or over minutes on your contract, you can still always make 911 calls in case of an emergency. Many cell phone plans include free directory assistance as well. 

Don't Use Credit Cards

Even though you've worked all your life to build an excellent credit score, you really should avoid taking on new consumer debt during your post-retirement years. Switching to a cash or debit card only policy for purchases will help reduce your monthly bills so that you can stretch your income further. Keep your credit cards for legitimate uses only. If you do like to use credit cards in order to take advantage of reward programs, then pay off your balances every month so that they don't accrue interest. Treat credit card spending just as if you are spending cash, if you don't have the money in the bank to cover the bill, don't buy things on credit.

Share Vacation Expenses

It is natural to want to travel during your golden years and you've earned that privilege. However, expensive cruises and long overseas trips can decimate your savings quickly. Travel with friends or family members who can help you cover some of the expenses such as lodging. If you like to spend time at the beach, see if you can rent a vacation home with another couple instead of staying at a pricey hotel. Split your trips up so that you have plenty of time to save up enough money so you can have a good time without feeling guilty about spending too much money. It is also a good idea to book vacations as early as possible.

Use Senior Discounts

If you go to a store, a diner, or any other place that offers discounts to senior citizens, then take advantage of them. Some people pass up on these discounts because they make them feel "old" or they don't like revealing their true age. This is like throwing money away. Even if it is, only a small percentage off, senior citizen discounts save you money. If someone were going to sell you something for $5, would you pay $10 for it? No, of course you wouldn't. Not asking about senior discounts or turning them down is the same as paying for more for things than you really have to. Some places only offer discounts on certain days, so plan your schedule around discount times.

Review Your Monthly Bills

Every bit of money you can take off your monthly bills is more money in your pocket. For example, look at your cable bill carefully. Do you really watch all those channels? You can most likely switch to a basic plan that is less expensive. Be sure to turn off lights when you leave a room and unplug appliances that you don't use very often. It is also a good idea not to overindulge in heating and air condition. That doesn't mean you have to be uncomfortable, but don't keep your home ridiculously cold in the summer and sweltering during the winter. Utility costs are typically a large chunk of household expenses, so try to be conservative. 

Cut Clothing Expenses

Yes, you do want to have nice clothes when you go out, but you don't need to keep a wardrobe full of professional attire as you had when you were working. Mix up your wardrobe so that you have nice clothes for special occasions and some inexpensive clothes for just running around doing errands or doing chores around the house. Locate some second hand shops in good neighborhoods and you can save a lot of money on clothes, especially everyday wear. That doesn't mean you shouldn't buy new clothes at all, but allot money in your budget for clothing and stick to that fixed amount.

There really is no such thing as having too much money saved up for retirement. Retirement is just another phase of your life, not the end of it. Don't make the mistake of spending money as if you are going to die quickly. Many people live 20 years or more past their retirement age. Be a little frugal about spending money and it will help you stretch your retirement income a lot further. Sure, you can splurge occasionally, but makes sure it is a planned expense.

About the Author: Tony Standin is a personal finance expert with a passion for frugal living. His goal is to help others learn to plan, budget, and save for the future so they can experience the most comfortable retirement possible!

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