Many retired Americans are struggling financially. A recent BadCredit.org survey of Americans ages 65 and older found that while 78% of seniors have retired, more than half (59%) do not have enough money to maintain their retirement.
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The survey also found that 35% of retirees don’t feel financially stable and 36% have struggled to make ends meet after they stopped working. Because of this, many retirees have had to cut back on several common expenses.
Here are the expenses retirees are cutting out of their budgets.
Top Expenses Retirees Can’t Afford
The survey found that retirees don’t have sufficient funds to cover many common expenses, including:
- Unexpected emergencies (63%)
- Travel (60%)
- Longer life expectancy (49%)
- Everyday living expenses (37%)
- Caring for others (partner, kids, etc.) (31%)
More than 1 in 2 retirees have had to make lifestyle changes due to financial concerns, the survey found.
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Why Retirees Can’t Afford Basic Expenses
While certain expenses, like travel, are nice-to-haves, an alarming number of retirees can’t afford unexpected emergencies or everyday living expenses. This is typically due to insufficient retirement savings.
“Unfortunately, this has been commonplace for a long time,” said Erica Sandberg, consumer finance expert with BadCredit.org. “A primary reason is that many people over-relied on Social Security retirement benefits. However, the average monthly check is between $1,700 to $1,900, and very often that is simply not enough to live on. Add no or insufficient savings, high housing costs, rising inflation and expensive medical care to the mix, and many millions of Americans end up in a terrible financial position at retirement.”
Tips for Retirees Who Can’t Afford Their Expenses
Living in constant financial stress can take a big toll on retirees. If you’re in a position where you are having trouble covering your expenses, it’s time to take action to change your situation.
“Figure out how much more you need to make ends meet and to enjoy your life,” Sandberg said. “One way is to add an income stream. As long as you have reached full retirement age, you can receive Social Security retirement benefits and those earnings won’t reduce your benefits. So if you can and want to take on a part-time job or gig work, especially in a field that interests you, go for it.”
In fact, the survey found that 58% of retirees have sought out additional work.
If going back to work is not an option, consider leveraging your home equity.
“If you’re a homeowner over the age of 62 and have paid off your loan, you may look into a reverse mortgage,” Sandberg said. “You can draw from the equity and stay in the home. There are some downsides, however, such as a potential impact on Medicaid benefits, but in some cases, it can help tremendously.”
It’s also helpful to look for ways you can trim your current spending.
“Consider downsizing and finding areas in your budget where you can reasonably cut down without impacting your life,” Sandberg said. “Almost everyone, no matter their age, can identify waste and then reduce it. Pull in friends and family members. Share costs, buy in bulk. Search what is available for free to senior citizens in your area, too. State and local governments, as well as schools and nonprofits, offer everything from activities to classes either at a discount or at no cost at all. Make the most of what is available in your area.”
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This article originally appeared on GOBankingRates.com: 5 Common Expenses Retirees Say They Can’t Afford
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