Broke Seniors: 5 Tips for Enjoying Retirement on a Budget

July 9, 2015

While the U.S. Bureau of Economic Research claims the Great Recession ended in 2009, many Americans lost homes, jobs and resources at an age where financial recovery was difficult if not impossible. As a result, 19% of adults aged 55 to 64 are going into retirement with no savings whatsoever. [1]

If you or a loved one is a senior with no retirement savings, these tips might help you enjoy your retirement with more independence and enjoyment even if it’s on a tighter budget.

First, understanding where money goes during the retirement years provides perspective and ideas of where to make changes. A study conducted by the Employee Benefit Research Institute found[2] that, on average, those 65-74 divide monthly income in these proportions:

43% – housing and housing-related expenses
14% – transportation
13% – food
11% – health
9% – entertainment
3% – clothing
7% – other expenses

1. Save on Housing by Scaling Down

Considering the big budget chunk housing takes of a budget, Bruce McClary of the National Foundation of Credit Counseling recommends considering downsizing if possible. A smaller home requires less maintenance, lower utility bills and less rent or mortgage rates. Further, seniors can sell belongings they don’t need any more in order to boost add their savings accounts. While some might resent this suggestion, the small or “Tiny House” movement that advocates living simply in smaller homes has its own Wikipedia entry[3], documentary, conference and countless articles written about it. Where the “small” house is considered between 400 and 1000 square feet, a house isn’t considered “tiny” unless it’s under 400 square feet. Aside from saving you money and maintenance, smaller homes are easier for seniors with limited mobility get around, often eliminating stairs and reducing the opportunity for injury.

2. Saving on Food

Everyone knows that eating out is expensive, but NPD Group, a market research firm that tracks eating trends pinpointed that a restaurant meal costs three times what the same meal would cost if made at home. Because eating out can be such a treat, seniors on a tight budget can work the senior discounts and patronize the chains that don’t involve tipping. Keep in mind food discounts at supercenters, dollar stores, wholesale clubs and farmers markets and eat produce in season when it’s least expensive. Freeze $2 quarts of May strawberries for use in the winter when the price rises to $5 per quart. Another side benefit of reducing meals out is that it can be better for your health, usually reducing the level of fat, sugar and sodium in your diet.

3. Get Whatever Government Benefits and Utility Discounts You Qualify For

The Great Recession, divorce and other financial hardships occur no matter how hard someone works. The social safety net exists to benefit everyone. Utilize it to stay within a reasonable and healthy lifestyle. Government programs can help with:

energy bills through the Low Income Energy Home Assistance Program (LIEHAP)
basic local telephone services through the Link Up or LifeLine programs
food through the SNAP program
medical care through MediCal and the Affordable Care Act (also known as Obamacare)

The American Association of Retired Persons’ (AARP) Guide to Public Benefits delineates all of these programs and organizations clearly. It also includes links to each program and guidelines for applying. Also, check with your other local non-profits and faith based support groups for other types of assistance such as friendly visitor programs, transportation assistance or financial management help.

4. Scale Down to One Car or Use the Bus

Couples living close to trolley or bus lines with two cars can sell one car and take turns using public transportation. Savings on gas, insurance and maintenance can amount to thousands each year. Also, many public transportation programs provide senior or low income rate discounts. Make sure to check what programs are available in your area!

5. Entertain or learn for less!

Take advantage of the public resources available to you for entertainment and education. Borrow books, movies and music from the public library. Check in with your chamber of commerce for free local entertainment such as concerts or movies in the park or street fairs. Stay on the mailing lists for local museums and universities to find out about their free days and lectures. Community colleges in some states allow seniors to audit classes for free. Find the hobbies that don’t cost money: hiking, biking, swimming at the community pool. Have friends over for potlucks rather than going out.

My Care Match Supports Seniors of All Budgets

Check back regularly with My Care Match for helpful articles on staying active, healthy and independent during your senior years. Dedicated to the well-being of those over 65, we’re always watching for the latest research and most robust tips to enrich the lives of seniors and their loved ones. If you’re in need of home care providers or want to compare assisted living options, contact us with any questions you may have. We look forward to jump-starting your affordable retirement!

[1] U.S. Federal Reserve, reported in “31% of Americans have no retirements savings at all.” Money.cnn.com

[2] Banerjee, Sudipto. Expenditure Pattern of Older Americans. Employee Benefit Research Institute. February 2012

[3] “Small House Movement” www.Wikipedia.com

About the Author

Doug Breuer is co-founder of MyCareMatch.com and has worked in senior care for the last 9 years for the State of Oregon. From investigating cases of elder abuse to managing the delivery of long term care to residents of Central Oregon, Doug has been involved in all aspects of senior care.

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