Essential Budget Tips for Seniors on Fixed Incomes

Read Time: 4:47
Published: Apr 10th, 2021
Essential Budget Tips for Seniors on Fixed Incomes

For seniors, retirement brings plenty of welcome changes. You have more time to spend on your hobbies, see your loved ones, and simply relax. But you might also need to make some significant changes to your budget now that you're living on a fixed income — especially if you can't downsize to cut down on your cost of living. 

There are plenty of resources that can help you prepare for major expenses like assisted living fees and health care, and in the meantime, you can implement some of these strategies to shrink your spending. If you are over age 50, planning for the decades ahead will help ease retirement stress. If you have an older parent, you can discuss their plans on being on a fixed income in their retirement. 

Track Spending

To start cutting down on unnecessary spending, you need to go over your portfolio, figure out how much you can comfortably spend each month, and create a realistic budget. You'll need to begin tracking your spending to make sure that you're staying within your budget. While there are free apps you can use to log your spending, you can simply use a pen and paper if you'd prefer!

Use Coupons

It's important to shop from retailers that offer reasonable prices for their products. Before you go out shopping, do some research to see if you can find any applicable coupons. Using coupons can help you get discounts on everything from home goods to clothing. For instance, you can seek out coupons from popular retailers like Target. If you plan to do some shopping at Target, look for Target coupons, promo codes, and running deals to get the best prices and stay under your budget.

Lower Monthly Bills

You may have some bills that are fixed, but chances are, you can take steps to lower your utility bills. For instance, to reduce your electric bill, Allstate recommends switching to energy-efficient lightbulbs and unplugging devices and chargers when they're not in use. You can also research other Internet or phone service providers in your area to see if you could secure lower rates for these bills. 

Cook at Home

When you're retired, it can be tempting to go out to eat or order takeout frequently. After all, when you are traveling more often, planning weekends with your family, or simply trying to relax, it's always easier to pay someone else to handle the cooking. But cooking at home can help you save hundreds of dollars per month. To save money on groceries, The Simple Dollar recommends shopping early or late in the day so that you can get the first pick of items that are on sale. Practice cooking new recipes to sharpen your skills in the kitchen, and consider starting a garden so that you can enjoy fresh vegetables, fruits, and herbs.

Try Free Activities

With extra free time, you might find yourself spending more than you used to on various activities. But you don't have to spend lots of money to have fun. Take some time to find free activities in your community. For instance, you can get a library card to check out books and movies and attend free events. You can explore local parks, go hiking, or go to the beach if you live near the coast. Visiting local museums is often free, too.

Tax Hints

The IRS reminds us that if you do not itemize your deductions, you can get a higher standard deduction amount if you and/or your spouse are 65 years old or older. Higher standard deductions are available if either you or your spouse is blind. There are credits available for the elderly and disabled.

Remember, tax rules change all the time. Find a tax professional to help you find the best ways to lower taxes and take advantage of credits and deductions. 

Savings Money Starts Early

Saving and planning before your retirement will make your retirement much more successful. Contribute to an employer's 401(k) or other retirement programs when you have the opportunity. Leave that money alone! Remember, social security is only a supplement to your future retirement income.

Health Care

When you are age 65, you will have Medicareas your health insurance. You will want a MedicareSupplement to cover the large deductibles in the plan. If you think you will be on a very tight budget, MedicareAdvantage plans could be an answer with little or no premiums. They also typically include prescription drugs and other services like dental. Keep in mind; generally, you will be in an HMO-type program with many of these MedicareAdvantage plans, so find expert help before deciding that is an option.

Long-term health care is not covered by Medicareand supplements beyond a limited amount of skilled care. The best time to consider Long-Term Care Insurance is in your 40s or 50s. If you have savings to protect, you will want to speak with a specialist to determine if LTC Insurance is suitable. 

It can take some time to get used to living on a fixed income. But as you adjust to your new budget, you'll find ways to improve your quality of life and enjoy your golden years without spending too much money. By following these tips, you'll see just how easy it is to live a happy, healthy lifestyle while staying frugal. 

Looking for resources on long-term care like this article? LTC News is packed with information to help your family make smart decisions about aging, health, caregiving, long-term care, and retirement planning. Check out the other articles and resources on LTC NEWS today.

About the Author

Mitchell Abbott is a co-creator of Elder Spark. The site aims to help provide resources to help seniors live healthier and happier lives. In his free time, Mitchell enjoys reading and hiking with his dog.

Editor's Note

A complete retirement plan should include a strategy for longevity and the impact that long-term health care will have on you, your family, income, savings, lifestyle, and legacy. This includes the consequences due to dementia. Affordable Long-Term Care Insurance gives you access to your choice of quality care either at home or in a facility.

Remember, Long-Term Care Insurance will pay for long-term custodial care, the most common type of care we will need. Health insurance, including Medicareand MedicareSupplements, will only pay for a small portion of skilled care. Medicaid will only pay if you have little or no savings and income.

You Must Health Qualify to Obtain Coverage

The underwriting criteria are different with each company. You will have to answer some health questions even to obtain accurate quotes. You ideally want to get coverage when you enjoy good health. If you are already receiving care in your home or if you live in a care facility, you would be ineligible for coverage. 

Seek Help of a Qualified LTC Specialist

A Long-Term Care specialist can help you determine your eligibility based on your health history and other factors. Most financial planners and general insurance agents are not knowledgeable about underwriting, features, benefits, federal/state partnership programs, policy design, and claims.

Find a qualified specialist by clicking here.

LTC NEWS Cost of Care Calculator

Your research should include finding the current and future cost of long-term care services in the area you live – or plan on living in the future. Use the LTC NEWS cost of care calculator by clicking here.

Other research tools are available, including the Ultimate Long-Term Care Insurance Guide. Review the guide by clicking here.

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Reach an educated audience. Readers of LTC NEWS are researching retirement issues, including aging, health, caregiving, and long-term care. Other readers seek information for a parent or other loved one who is experiencing declining health or aging issues and require extended care.   

Many marketing opportunities are available, including sponsored content articles. Sponsored content offers you a long-form way to sell yourself, your company, and your ideas.

Learn more about how LTC NEWS can help you market your business - click here.

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LTC NEWS offers many resources to help families address the consequences of long-term care, aging, health, caregiving, and other retirement issues. You can be part of the effort to help educate consumers throughout the U.S. and around the world.

Write a story for publication on LTC NEWS and let America hear what you have to say. Be sure your article fits the LTC NEWS target audience of adults 40-70.

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LTC News Contributor Mitchell Abbott
Mitchell Abbott

Contributor Since
December 22nd, 2020

Co-creator of Elder Spark.

About the Author

Mitchell enjoys reading and hiking with his dog.

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