For many retired seniors in the United States, Social Security is the most common source of retirement income, which averages $1,862 per month. With the typical retired household spending being $5,000 monthly, additional sources of income are necessary. In fact, 80% of retirees rely on supplementary earnings, such as their pension or rental income.
When you’re living on a fixed income, whether from one source or several, you often have limited wiggle room each month. With rising inflation, your expenses increase while your income stays the same. For those on a tight budget, medical bills or home repairs can feel like a real setback. Fortunately, there are many ways to save money during your retirement.
The Importance of Budgeting
For those no longer working, senior citizens’ financial planning becomes even more crucial. Creating a budget can help ensure you’re allocating your funds efficiently. If you already have one, look for areas where you might be able to trim back.
Here are some budgeting tools and techniques you can use:
- Track your spending: Limiting your spending requires insight into where your money is going. While a notebook or spreadsheet will do, a budget tracker like Credit Karma offers handy visuals that make it easy to understand what you spend on things like health care, entertainment and groceries each month. If you notice your spending in a particular area goes up, you can rein it back in.
- Categorize your expenses: Your expenses should fall into one of two categories — discretionary or essential. While you might not be able to eliminate spending habits surrounding health care, you can start preparing more meals at home rather than dining out.
- Set financial goals: Whether you’re saving for a rainy day or your dream vacation, put aside money each month.
Budgeting is a fantastic tool for older adults’ financial management, but it’s also just the beginning. There are many other ways to strengthen your financial independence.
Four Money-Saving Strategies for Seniors
Here are four strategies that can help you save.
1. Maximize Your Health Care Savings
Medical costs probably represent a substantial portion of your overall spending. A typical 65-year-old who left the workforce in 2024 can expect to spend $165,000 on medical expenses throughout their retirement. Fortunately, Medicare coverage starts at this age.
To make the most of Medicare and health care for seniors, understanding the different plans and choosing the one most suited to your needs is vital. This way, you know what is covered versus what isn’t, allowing you to explore supplemental options like Medigap to reduce out-of-pocket costs.
However, Medicare and Medigap aren’t free — your premiums, deductibles, coinsurance and copayments can add up over time. Follow these tips to save money while still accessing the care you need:
- Consider your benefits: Check your eligibility for Medicare Savings Programs (MSPs) — state-administered benefits designed to ease the burden of these expenses. Similarly, look into Extra Help, a program that subsidizes the costs of prescription medications for seniors with limited income.
- Opt for generic medications: Both name-brand and generic drugs are held to the same high standards, so you’ll get the same product with the same key ingredients and functionality. When you choose a name-brand drug, you’re likely paying a premium for the brand itself.
- Stay healthy: Caring for your health may help you avoid illnesses that could lead to big medical bills down the road. Focus on prevention by taking advantage of the preventive services and screenings that Medicare Part B covers, getting enough physical activity and implementing healthy eating habits.
2. Unlock Benefits and Discounts
In addition to MSPs and Extra Help, various money-saving benefits and discounts for seniors are available. However, older adults commonly miss out on opportunities to save.
Many don’t know that such offerings exist, while others are unsure of how to apply or if they qualify. Some might worry they’d be using resources that are better suited for those who need them more, but that’s simply not the case. The following programs, benefits and discounts are designed for any senior who qualifies:
- Property tax exemptions: Property taxes often go up as home values increase, impacting your budget if you’re a homeowner. Luckily, many states offer a property tax exemption to seniors aged 65 and above, which could translate into substantial savings each year.
- Utility assistance programs: If you find it challenging to keep up with your heating and cooling bills, the Low-Income Home Energy Assistance Program (LIHEAP) can offer relief. LIHEAP is a federally funded program that helps households with their energy bills, repairs and replacements, and weatherization projects. Many utility companies also offer discounts for seniors.
- Food assistance programs: The Supplemental Nutrition Assistance Program (SNAP) helps people who are at risk of going hungry. SNAP can help older adults cover the cost of groceries, providing a monthly stipend for participating stores and farmers markets.
3. Reduce Your Household and Living Expenses
Housing and living expenses for seniors can be a real concern. As you get older, your needs change — it’s smart to reassess your living situation and determine whether it still fits your budget. So, if the costs are starting to pile up, consider:
- Moving somewhere more affordable: Relocating to a city or state with a lower cost of living could save you tens of thousands of dollars each year.
- Downsizing: That big family home probably served you well for many years. But now that the kids are out of the house, a smaller space could offer you more freedom and financial flexibility.
- Finding a housemate: If you live alone and you have a good friend or two who are in a similar situation, think about renting a place together. You’d each have your own bedroom, and you could split the costs of rent and utilities.
You can save even more on your utilities by noting your usage habits. For example, turning off the lights when you’re not in the room could cut down your electricity expenses. Similarly, turning off the bathroom faucet when you brush your teeth could lower your water bill.
You may also be able to negotiate a reduced rate for your cable, internet and phone services. Call your service provider and inquire about getting a better deal.
4. Practice Savvy Shopping and Bargain Hunting
The following tips for shopping and bargain hunting for seniors can help you get the most bang for your buck:
- Use coupons and promos: Download the store’s app to see if any coupons or promo codes could help you save on the things you want.
- Sign up for reward programs: Your favorite stores, pharmacies or restaurants might offer rewards programs, allowing you to earn coupons or money to spend in-store just by purchasing the items you’re likely already buying. Using those free rewards toward other essentials can make a real difference in what you spend.
- Shop on senior shopping days: Many stores across the country offer special senior discounts on Tuesdays, Wednesdays and Thursdays.
- Shop at thrift stores: If you love a good bargain, you might be able to get a discount on clothing, home goods and other already low-priced items. For example, most Goodwill stores provide discounts for seniors.
When to Seek Professional Advice
If you’re unsure about your finances or need help planning for something like in-home care, seeking professional financial advice and counseling services is a smart move. It’s never too late to start saving, and a retirement advisor can help you make the most of your income and investments, as well as avoid paying more taxes than you need to.
Credit and debt management for seniors can be a source of stress, especially when living on a fixed income. If you find it tough to manage your debt, there are resources available to help, like the Consumer Credit Counseling Service and the National Foundation for Credit Counseling. Both organizations can connect you with qualified professionals in your area who can assist with debt reduction. You may even qualify for debt relief options.
Save Money on the Care You Need With Village Caregiving
Saving money doesn’t mean going without what you want or need — it simply means finding more cost-effective alternatives. In-home care is often more affordable than a nursing home, and it may also be necessary to live at home during your retirement.
At Village Caregiving, we offer compassionate in-home care services at competitive rates. If you need help paying for our services, we’ll help you access financial support through state, federal or insurance benefits.
To learn more about which benefits we accept, contact us today!
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