I just saw an article on Retirement on Social Security Alone that is simply shocking in its stupidity. And it was published by AARP. Here are the heading and author.
Sounds good right? They are AARP. I mean, if anyone knows the answer, it must be AARP! Unfortunately, Ms. Ambrose and her editor don’t have a clue. They are probably 20 years or more away from retirement. They aren’t even thinking about the problems of today’s seniors.
This is just one of the thousands of bits of misinformation seniors are faced with. These writers don’t have the solutions. I doubt they even understand the questions.
So let’s examine the “tips” and see if we can learn anything. But don’t get your hopes up.
The First 5 Tips From AARP and My Comments
- Delay taking Social Security. [Since people asking this question do not have any other source of income to cover their living expenses, this “tip” says KEEP WORKING. Thanks for nothing, Eileen.]
- If you think you messed up and claimed SS already, and it’s not too late, pay it all back, get your old job back and KEEP WORKING. Then delay taking SS until later. [Wow, Eileen, your second tip sounds like the first one. And of course, she is assuming that your old job is waiting for you – good luck getting your old job back!]
- Maximize survivor benefits. [This means the spouse who makes more must KEEP WORKING (preferably until age 70!) At least one of you is happy. Do you all notice a trend, here? None of these “tips” tell you how to retire on Social Security alone!]
- Eliminate debt. [Another great suggestion, Eileen. Since we probably don’t have any savings, we KEEP WORKING until we pay off debt. Now, why didn’t we think of that?]
- Move to a less expensive locale. In this one, she compares the cost of living in Boston to that of Augusta, Georgia. Supposedly, you can find a job in Augusta that pays the same as you made in Boston and save the difference. Of course, that means you still KEEP WORKING. And good luck changing jobs in your 60s and finding a job that pays the same as you made in Boston.]
So Let’s Summarize AARP’s Tips for Retiring on SS Alone
Don’t Retire. And Keep Working.
Where Do They Find These Writers? And what editor allowed that garbage to be published?
Let’s Get the Rest of the Bad News Out of the Way
It seems to me that for Retirement on Social Security Alone to be possible, the number 1 answer is to find a place where your retirement income will cover your living expenses. But in the opinion of many authorities, that place does not exist in the USA. I’m sorry if this is bad news to you, but it is the truth. We have done the research and even tried it ourselves.
What About Those Articles About Cheapest Places to Retire in the US?
I bet like us, you have seen the articles that talk about the cheapest places to retire in the US. But have you noticed that every one of those articles makes some really big assumptions?
- They assume that you have a home you can sell and take the proceeds and pay cash for a home in one of these new locations. That is why their estimated costs don’t include monthly rent or a mortgage payment. Adding $1,200 or more in rent expense or payment will by itself make it impossible to cover all of your living expenses with your SS checks.
- They assume that you don’t have a car payment. When you look at their estimate of transportation expenses, they include fuel, maintenance, repairs, and even insurance, but never a car payment.
- They also assume that wherever you are headed will be your home for the remainder of your life. There is no consideration of moving costs. But what happens if you get there and don’t like it? It’s too hot, or too cold, or there are too many or too few people. Or the promised benefits aren’t real or cost too much to afford. Your monthly SS checks are just barely keeping you afloat. Where is the money coming from to sell your house, and move to another place?
- And what about entertainment and expenses for just plain fun? How are you going to make new friends and have any kind of life if you can’t afford to socialize?
Shocking Headlines Appear Every Day
- You Won’t Believe How Many Americans Have No Retirement Savings Motley Fool
- 67% of Americans say they’ll outlive their retirement savings—here’s how many have nothing saved at all CNBC
- Half of Older Americans Have Nothing in Retirement Savings – Bloomberg
- Survey Finds 42% of Americans Will Retire Broke — Here’s Why – Gobankingrates.com
These are Baby Boomers we are talking about. We are supposed to be the wealthiest generation ever in history. And yet it sounds like many of us will enter retirement with nothing more than a Social Security check. I say “us” because my wife and I are also “Boomers”. Is there any hope? Are there any solutions out there? Where can we go for answers?
Real Tips For Retirement on Social Security Alone
Answer #1 – Whatever Your Means Are, Live Within Them. Please don’t shoot the messenger, but stay with me a few more minutes.
- If you can’t afford to own a car, find a place to live where you don’t need one.
- If you can’t afford health insurance and healthcare expenses, you must find a place to live that has high-quality healthcare that you can afford. You can’t take chances with your health!
- Can you afford a reasonable home or apartment where you live currently? If not, look somewhere else until you find the right place at the right price.
- Are there places, groups, and activities that offer the possibility to meet and make new friends?
We cannot live like hermits. We need friends and social activities. So this is a requirement of any place we will live.
- Are you willing to do whatever it takes to live within your means? If so, you would be surprised at the possibilities.
A Few Examples of Places Where This is Possible
Paulette and I tried living there for 3 months. It is a beautiful city in the mountains with an incredible history and culture. One of the most beautiful landmarks is the “New” Cathedral with its three blue domes. It was finished in 1870! The “Old” Cathedral was completed around 1650 and still stands across the main square from the New Cathedral. We attended a concert in the Old Cathedral, so it is still in use today.
Our furnished 3 bed/3 bath apartment was on the 2nd floor of a relatively new brick Condominium complex 3 blocks from the largest hospital in Cuenca. The cost was a modest $650 per month plus $160 for utilities and high-speed internet. We have friends who rent a large house for about $450 per month.
Transportation costs are ridiculously cheap.
You don’t need a car. Taxis generally cost less than $2. But buses are everywhere and run frequently. I was able to use my bus card to ride for 12.5 cents USD per ride. Paulette wasn’t old enough, so her rides cost 25 cents. But the air is clean, the weather is great, and we walked to many places. And there was an active community of North Americans. There is actually a neighborhood called “Gringolandia”.
An hour bus ride will take you to 13,500 feet and a beautiful National Park. On Christmas Eve, there is an all-day parade that seems to include almost every resident of Cuenca. There are many excellent large markets that sell every kind of food product. The cost of living is about 1/4 of the cost in the USA. A couple can live comfortably on $2,500 per month or less.
Lake Chapala, Mexico –
Have you ever heard of Ajijic (Ah-he-hek)? It is a town heavily populated by North Americans in Mexico. It is located about 1 hour south of Guadalajara and only 40 minutes from the Guadalajara International Airport with its nonstop or 1 stop flights to many destinations in the USA.
Lake Chapala is the largest lake in Mexico. The communities of Chapala, Ajijic, and others on the north side of the lake claim a population of 30,000 Expats mostly from the US, Canada, and Europe. The elevation of 5,000 feet cools the weather down and provides comfortable living conditions year round. And this area of central Mexico gets much less rain than Panama and Costa Rica.
Rental costs appear to be rising due to the increasing number of Expats. But the total cost of living is still much less than in the US and Canada. But the lifestyle appears to be very easy-going, and the Expat community is as close as it has been for many years. There are lots of great articles and videos available on the web. A good keyword to start your search would be Lake Chapala. I don’t know if a car is necessary, so that might be something to check out.
Panama City, Panama
The headquarters of the famous Panama Canal is a large modern-looking city with lots of high-rise Condos, Apartments, and Hotels. The skyline is absolutely breath-taking. There are two airports, but Tocumen (PTY) is by far the largest with direct flights to many international destinations.
Panama City is also known for its excellent restaurants, and history dating back to 2500 BC. But Spanish colonization started in the early 1500s. Panama City is located on the Pacific Coast at the entrance of the Panama Canal. It is a very large city of over 4 million people. Given its location at Sea level, the temperature can get very hot. But on the other hand, you won’t worry about snow.
Cost of living in Panama City will be higher than other places you might consider. However, Panama uses the US Dollar as its main currency, so you need not worry about currency fluctuations as in other parts of Latin America. A car is not required as there is excellent public transportation, and taxis and Uber cars are inexpensive.
Summary – Retirement on Social Security Alone is Possible if you consider places outside the USA.
Part of the answer could be to increase income, but…
If retirement on Social Security alone is not possible for you, then you need more income. For the moment, let’s just ignore income taxes. Because if income tax becomes a problem, then you will have no problems covering reasonable living expenses.
If you need more income, I’m not talking about a commuter job. Jobs cost money. Yes, that’s right. In my case, that meant I had to live in a big city and have a reliable car. I also needed a better wardrobe, ate out much more frequently, and took expensive vacations. Finally, I hired people to do at home what I couldn’t do because I was too busy working. And I spent 11 hours a day getting ready for, driving to, working at, and driving home from my workplace. That didn’t leave much time for anything else.
All those additional expenses make it very hard to save. And working at our age gets harder and harder. It takes longer to do things, and even though we have been doing our jobs for a very long time, it seems like some new program, or app or software, or company reorganization throws new challenges our way just as we are supposed to be slowing down.
So not a traditional job? What else is there?
How about working from home? You have a lifetime of experiences to share. So why not do what more than 500 million people are doing – start a blog. If you do it right, you will have fun, and possibly create an income stream that will take care of you for the rest of your life.
If you want to learn more, please click here to read my article on How to Start a Blog for Beginners.