Social Security provides a vital source of income for many retirees, but living on a fixed income can be challenging. To ensure a comfortable retirement, it’s important to cut expenses where possible. Housing costs are often the biggest expense for retirees, amounting to about 25% of spending for Americans 65 and older.
For the 40% of older homeowners who still have a mortgage, housing costs are usually much higher. In 2021, older mortgage-holders had median monthly housing costs of $1,470 compared to $520 for homeowners without mortgages and $940 for renters. Downsizing to a smaller home or relocating to a less expensive area can significantly reduce mortgage payments and maintenance costs.
Home repairs are the most common unexpected expense for retirees, so having less house to maintain can help mitigate this financial surprise.
Reducing mortgage for better retirement
Selling a larger home and moving to a cheaper one can also provide a boost to retirement savings.
Those aged 60 to 69 have the highest potential to unlock home equity through relocation, which can be used to add more money to a retirement nest egg. Choosing a location with good access to public transportation can eliminate the need for a car, another major expense for retirees. The American Automobile Association estimates that the average cost of vehicle ownership is over $12,000, which can be prohibitive for the half of Americans relying primarily on Social Security.
Anna Annecca, a Senior Care Expert and Clinical Operations Leader, advises retirees to consider locations that are well-connected to major transportation lines. “Driving can become more challenging with age,” she noted. By making these adjustments, retirees can successfully cut their expenses and make their Social Security income stretch further, ensuring a comfortable and sustainable quality of life in their golden years.
Noah Nguyen is a multi-talented developer who brings a unique perspective to his craft. Initially a creative writing professor, he turned to Dev work for the ability to work remotely. He now lives in Seattle, spending time hiking and drinking craft beer with his fiancee.
