3 Steps to Retiring Comfortably on Social Security Alone | The Motley Fool

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Social Security benefits are the primary source of income for many retirees, with nearly one-quarter of married couples and close to half of unmarried beneficiaries depending on their monthly checks for at least 90% of their retirement income, according to the Social Security Administration.

Although benefits are only designed to replace approximately 40% of the average earner’s pre-retirement income, if your retirement fund isn’t as strong as you’d like and you don’t have access to a pension or any other source of income, you may have no choice but to rely on your benefits for all your income in retirement.

However, that can be tricky considering the average retiree only receives around $18,000 per year in benefits. For many retirees, it’s tough to survive on that income. But if you’re willing to make a few lifestyle changes and take these three steps, you can give yourself a better shot at living comfortably on Social Security alone.

1. Consider moving to a more affordable city or neighborhood

In order to survive on just your benefits, you may need to lower your overall cost of living. And one of the most effective ways to do that is to move to a more affordable area. By relocating to a less expensive neighborhood, you may be able to save money on everything from housing to taxes to transportation and more. Depending on how drastic the difference is in the cost of living, you could potentially save hundreds or even thousands of dollars per month by moving.

Keep in mind, though, that there is a lot of research you’ll need to do before you start packing your bags. Not only will you need to consider the more obvious expenses (like housing and taxes), but you’ll also have to think about the subtle (yet still expensive) costs. For example, is there good quality healthcare available in your prospective new city? If not, and you know you’ll be making frequent trips to the doctor, you may rack up hefty transportation bills while traveling to a neighboring city for doctor visits. Or if you’re moving far away from friends and family, how much will you spend taking trips back to visit?

If you’ve thought it through and found the perfect new city to call home, moving can be one of the best decisions you’ll ever make. By saving more money each month, you can afford a more comfortable retirement without sacrificing your quality of life.

2. Delay claiming benefits past your full retirement age

The most popular age to begin claiming benefits is as early as possible at age 62, according to a study from the Center for Retirement Research at Boston College. However, if you were to delay claiming benefits until age 70, you could receive substantially larger checks.

For example, say your full retirement age (FRA) is 67 years old, and by claiming at that age you’d receive $1,500 per month. If you were to claim early at age 62, your benefits would be reduced by 30%, leaving you with $1,050 per month. But if you were to wait to file for benefits until age 70, you’d receive a 24% bonus on top of your full benefit amount, or $1,860 per month. If you’re hoping to live comfortably on your benefits alone in retirement, that extra $810 per month could go a long way.

Delaying benefits isn’t for everyone, and it may not be the best choice for those with health issues who don’t think they’ll spend decades in retirement. (After all, there’s not much point in waiting if you won’t have much time to spend your money anyway.) But if you have reason to believe you’ll enjoy a long retirement and you need to maximize your monthly checks, delaying benefits might be a great decision.

3. Make sure you’re taking advantage of all the types of benefits you’re entitled to

Most people are probably familiar with the standard retirement benefit, but there are other types of benefits you may be entitled to, such as spousal benefits, divorce benefits, and survivors benefits.

To be eligible for spousal or divorce benefits, you must currently be married or formerly married to someone who is eligible for retirement benefits. In addition, with divorce benefits, your marriage must have lasted at least 10 years. In both cases, the maximum you’re able to collect is 50% of the amount your spouse (or ex-spouse) can receive by claiming at their FRA. Keep in mind, too, that if you’re eligible for your own retirement benefits, you won’t receive your benefit amount in addition to whatever you’re entitled to receive in spousal or divorce benefits. Rather, you’ll only receive the amount that is higher.

Survivors benefits are a bit more flexible in that they’re available to various family members after a loved one passes away. Widows and widowers are typically eligible for survivors benefits as long as they’re age 60 or older, but divorced spouses, children, parents, and other family members can also be eligible in certain circumstances. The Social Security Administration may not always inform you if you’re entitled to other types of benefits, so it’s smart to do your research and apply for the types you’re eligible to collect.

If you’re expecting Social Security benefits to be your only source of income in retirement, it’s important to have a strategy in place to maximize your monthly checks. By taking these three steps, you’ll have a better chance of retiring comfortably on Social Security alone.