Social Security Cuts Are Coming: 9 Expenses That Retirees Should Avoid
Social Security cuts can come in many forms. Most people would think that their benefits are cut, but in other ways, thelegislature could raise the retirement age, meaning less money in the long run for those getting Social Security. The proposal to raise the retirement age has about 170 members of Congress backing it.
As reported by The Hill, the Republican party is fighting over raising the retirement age, which would cut Social Security and other benefits for retirees. They want to balance the budget and slash government spending by targeting retirement programs like Social Security.
How Raising the Age Would Mean Cuts
In June, a 176-member House Republican Study Committee (RSC) approved a fiscal plan to raise the retirement age to age 69. This would affect those who would turn 62 in 2033. The current retirement age is either 66 or 67, depending on your birth year. As the age goes up to 69, that means your benefits will be delayed in being paid out. People are not exactly living an extra 5, 6, or even ten more years. That means the older you are to receive benefits, the less social security you will receive in the long run.
Currently, the Federal Retirement Age is 67 for those born after 1960. This will have a major effect on Generation X and Millennials as they approach retirement. The people in favor of this plan say it is not a cut but just a delay in benefits. It just means that people have to work longer, and if they die at age 70, then they will have one year of retirement benefits.
9 Large Expenses to Avoid in Retirement
If you are one of those who save and invest for retirement from an early age, you may have enough money to not worry about social security. That may not be true for all people, and it will depend on those benefits. As retirement gets closer, it is best to see what expenses to avoid to make retirement an enjoyable part of life instead of a stressful, penny-pinching existence.
1. Multiple Cars
Retirement is here, and that means the time to be frugal can be thrown out the window. Not exactly. If benefits like Social Security get cut, then spending will be dramatically reduced. Buying multiple cars may not be the best bet for your retirement dollars. If you need to keep money longer, it may be best to stick to one or two cars and have more frugal choices like a Toyota, Honda, or Mazda. They are reliable and do not cost a ton for maintenance.
2. Avoid Peak Travel Time
You no longer need to travel whenever everyone else is traveling. That means you can save on-the-shoulder seasons. If you like traveling and want to do more, this is the time to save and avoid the summer or even the Christmas time. Avoiding these peak travel times will allow you to save more money and enjoy travel more.
3. Expenses Related to Children
As parents, raising our families to grow and be fruitful has been a joy. Sometimes, our kids may not all do well in life. Some adults continue to help their adult children financially. If money is tight, it may be a time to sit down with these children and cut that financial cord.
4. Housing Costs
If you still have a hefty mortgage that you are paying down, it may be time to downsize. Sell off your house and buy a much smaller one. Many people even opt to move into retirement communities. Small villas in these communities can be a good substitute for your house but with less maintenance and a smaller bill.
5. Going Out to Eat
You have been cooking all of your life to live more in retirement. As costs have skyrocketed recently, it could be a time to cut back on eating out. Eating out may be fun occasionally, but it can put a pretty large dent in your monthly budget.If benefits get cut from Social Security, it could be a time to trim back on eating out.
6. Expensive Entertainment/Leisure
In retirement, there will be more time to do hobbies, enjoy life, and be able to do what you can with your free time. That does not mean to spend hundreds of dollars a week golfing. Golfing may be fun in retirement, but costs can add up. Opt for some leisure activities that may be free, and take advantage of what communities may offer. These little savings can allow you to enjoy other activities that cost money.
7. Impulse Buys
Sometimes, those new gadgets or things we may want now may not be the best buys in the long term. Having a great set of golf clubs but not going out to use them could be a waste of money. So think before you buy, do research, and make sure it is not a useless thing that sits in your garage all the time.
8. Expensive Home Upgrades
Renovations could be costly depending on the materials and labor you use. As you enter those retirement years, remember that if Social Security is cut, you may not have as much money to spend. The return on investment may not be as high as you expect with home upgrades, either. It could be wiser to opt for cheaper upgrades, and if you decide to downsize, then you may have saved money on those expensive upgrades.
9. High Investment Fees
Investing can be difficult when you are working, and you may have a financial advisor to help you grow your money. As you are in retirement, your hope is that those investments are now helping pay for your expenses. With high investment fees, those gains could diminish a lot quicker than expected. So take a look at your investments and, if need be, try to minimize the costs.
Social Security Cuts Suck
We work close to forty years or more for retirement. It is hard to swallow when we hear that the retirement age could be raised, and we will receive less money as a result. It sucks. With these significant expenses to avoid, you can help lessen the blow in the case of fewer benefits. Take some time to make realistic plans and prevent those significant expenses.
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