For American pensioners, Social Security is considered a crucial program. A staggering 50% of people 65 and older depend on Social Security for a minimum of 50% of their family’s income, and 25% depend on it for at least 90%, as per the Social Security Administration. When paired with the simple fact that the typical monthly retirement payment will only be $1,790.56 as of 2023, in July, beneficiaries must maximize the use of their benefits. Here are five typical behaviors that lead some Social Security recipients to spend more than they should from their monthly benefits.
Being Way Too Generous
Many retirees have a natural propensity to indulge in extravagant gift-giving, especially for family members and charitable organizations. Giving is excellent in general, but if you’re struggling to make ends meet, it might become problematic. For instance, if your monthly Social Security check is only $1,790 on average, you won’t have much left over for charity endeavors. If you’re strapped for cash yet wish to help other people, think about giving your time rather than your money.
Eating Out Much Too Often
Many retirees try to pass their excess free time by discovering activities outside their homes. This is often a healthy action to take. However, it may be financially devastating if you’re tempted to try every new restaurant in town whenever you go out. All people can suffer from this, but retirees who depend on fixed earnings in particular can. Even while you shouldn’t isolate yourself and limit your dining out to just special occasions, ensure that you only do it when your budget allows it.
Purchasing A Brand-New Car
The average price of a brand-new car is now close to $50,000, which is typically significantly more than the ordinary senior living off of Social Security may afford. But even more than the high price, the worst part of buying a new car is the significant depreciation it experiences in the initial years following purchase. Your new car will often lose 20% of its worth in the first year alone, and after just five years, the total value of depreciation will be almost 60%. If you really must have a new vehicle, go with a certified pre-owned one. Even though you won’t see nearly as much depreciation, you’ll still probably receive at least some degree of warranty protection.
Given that they receive monthly checks and frequently have a lot of spare time, few casinos move out of the way to attract senior gamblers. Many casinos will even send free transportation or provide other incentives, like free lunches, particularly to draw in senior citizens. It’s crucial to stay away from these ploys if you rely on an income that is fixed, though, as you risk spending your whole Social Security cheque in one outing.
The majority of seniors take a minimum of one prescription drug, and just like any other consumer good, the price of a prescription might vary depending on where it is purchased. Always verify that your insurance will pay for your medication before shopping around for the best deal. Prescriptions that are generic rather than name-brand can be cheaper, and your insurance provider may even insist on it if you want coverage.