Somewhere, an older American — let’s call her Alison — is going to retire soon. She anticipates a Social Security check of $1,349.59, the national average as of July. She regrets not saving more for retirement, but has accepted the reality of her situation.
If you’re like Alison — facing retirement without a cash cushion — you’re in good company. In January, GoBankingRates.com surveyed a representative sample of Americans and found that among people 60 and older, just 26 percent felt they were financially on track for retirement. The remaining 74 percent within this age group lacked sufficient retirement savings. And among Americans of all age groups, a sobering 33 percent had nothing saved for retirement.
Anyone who tries to get by on Social Security income faces a lean retirement lifestyle. Here are questions to ask yourself before trying to stretch benefits as far as possible — and what you’ll realistically be able to afford.
1. How Much Home Can You Afford on Social Security?
Your Social Security check will stretch further if you find a cheap place to retire. Housing is the biggest expense most Americans face, according to BLS statistics.
Sun-loving Alison hopes to retire to an apartment in Tucson, Ariz. The median rent for a one-bedroom apartment is $575, according to Zillow. But let’s say Alison lucks out and finds an apartment for $540. She will spend 40 percent of her check on rent and will need to kick in a few extra bucks for utilities. So, rounding up, her monthly housing cost to $600 — leaving her with $749.59 of her Social Security check.
2. What Can You Eat on Social Security?
Dining at four-star restaurants is out if you’re living on Social Security. On average, roughly 12.5 percent of a consumer unit’s spending money goes toward food. In Phoenix — close enough to Tucson for our purposes — the average family spent $594 per month to eat in 2013-14, the most recent figures available from the BLS.
Phoenix averages 2.6 members per household, so we can estimate that the average person spends $228 per month to eat. Although Alison can splurge occasionally at a modest restaurant, living on Social Security means she will be eating at home most of the time.
Add up housing costs of $600 and $228 for food, and Alison is left with $521.59 of her Social Security check — a small sum for the remaining spending categories.
3. Can You Afford Healthcare on Social Security?
Alison might qualify for assistance in paying for her Medicare Part B premiums. Such aid would help her cover medical expenses, the No. 1 financial burden in the U.S. According to the government’s Medicare website, Alison’s monthly $1,349.59 check is beneath the income ceiling of $1,357 that qualifies her for assistance.
Medicare assistance benefits vary by state, so Alison should visit Medicare.gov and sign up for a conversation with someone from her state.
It will help if Alison can find ways to save on healthcare costs, such as purchasing generic drugs and using walk-in clinics instead of visiting emergency rooms. Assuming Alison qualifies for government help and is diligent about her medical spending, she can budget $150 per month toward medical costs. Alison now has $371.59 left in her budget.
Calculator: Social security retirement income estimator
4. What Type of Transportation Can You Afford While on Social Security?
Owning a car is expensive, especially on Social Security. The cost of operating a car can easily run into hundreds of dollars a month. With that price tag in mind, Alison has joined many other retirees by giving up her car.
Alison relies on public transportation services to get to doctor appointments. When going to the grocery store or meeting with friends, Alison uses the bus. On rare occasions, she splurges for a cab. She chose an apartment located near shops and restaurants. As long as her health holds out, she can walk to the grocery store and pharmacy.
Alison keeps transportation costs low at $100 per month. So, she’s now down to $271.59.
5. Can You Afford to Travel on Social Security?
After paying for necessities, Alison has $271.59 left for extras, which we describe in the next two categories. As you can already see, it is not easy to live on the average Social Security check.
With a tight budget, Alison and other retirees living on Social Security aren’t going on lavish vacations. Maybe Alison can afford a train or bus ticket to visit family, but cruises are out.
If travel is important to you, there are ways to squeeze it into the budget. Pairing up with family and friends can make travel a possibility. Camping vacations in state parks are economical. There are also many free events across the country.
6. Will You Earn Enough in Social Security to Cover Other Costs?
Remember, after spending for necessities, Alison was left with just $271.59 in her monthly budget. The amount of money she can spend in this final category — which includes entertainment — will largely depend on how much cash she earmarks for travel. She might be able to afford the occasional $1 movie at Redbox, but it’s unlikely she’ll be able to pay for the newest iPhone 7.
Finally, Alison will need a small cash cushion to cover emergencies. If she’s especially frugal, she might even have a little money left over to give to her favorite charity.
While Alison can make ends meet on her Social Security check, it won’t be easy. So, if you are a little younger than Alison, try to learn from her mistakes. Save a bit more today so you will have a greater sense of financial security in retirement.
This article originally appeared on GoBankingRates.