How to Adjust to Life on a Fixed Income
Updated: Jul 19, 2022
Retirement comes with plenty of benefits. You finally have time for all the things you love, from friends and family members to hobbies and passion projects. However, it also means adjusting to a fixed income. For many seniors, this can be a difficult and anxiety-inducing transition. But by implementing a strong plan, you can confidently take on the challenges of a fixed income.
What Is a Fixed Income?
When seniors begin pulling from their Social Security and retirement funds, their income becomes roughly the same every month – and, typically, it stays the same indefinitely.
Often, this monthly amount is less than retirees are used to bringing in from full-time work. However, it’s important to focus on the most positive aspect of a fixed income: stability. With a fixed income, you know what you’re bringing in each and every month, without fail.
Stability Empowers Budget Building
This consistent income means you’ll always be able to plan ahead for your budget. If you haven’t had a budget up until now, The Motley Fool explains there’s never been a better time to make one. Track your monthly expenses and categorize them into distinct spending categories. If your monthly spending tracks out ahead of your fixed-income rate, you’ll either need to cut costs or find ways to increase your funds each month.
Tips for Cutting Costs
Check Auto Insurance: If you haven’t updated your car insurance in a while, it can be worth it to shop around, since you might be able to pay substantially less per month than you currently are. Since you’re no longer driving to and from the office in retirement, your yearly mileage is likely a lot lower than it used to be. Many insurance companies are willing to offer lower premiums for lower mileage or safe driving records. Another idea to help you save is to take a defensive driving course, which you can even do online, or you might consider taking advantage of other transportation options, such as the affordable services offered through Dial-A-Bus.
Investigate Senior Discounts: Many companies value seniors’ business and offer discounts to older customers. Reach out to companies you regularly work with to see whether they offer such a discount and consider frequenting more businesses that do.
Bundle Services: Often, bundling services can save you a substantial amount of money. This is truest when it comes to entertainment and communication services such as the Internet or cable. Contact your provider and see if there are ways you can save. Stay savvy, however, and make sure you fully understand the deal – often the introductory rate is excellent but temporary, and you may wind up spending more in the long run.
Ways to Increase Funds
Sell Stuff You Don’t Use: Everyone has items around the house they’re not using anymore. Retirement offers the perfect time to pare down. Take a look through your things and honestly appraise which items are and aren’t still useful. It’s okay to hold onto things for sentimental value, but unless you have a lot of cherished memories with that dust-covered treadmill, consider putting it up for sale.
Consider the Gig Economy: One way to make extra cash is getting a self-managed gig, such as rideshare driving or freelance customer support. The great thing about this kind of job is that you control your own hours and how much you do – or don’t – work. They’re ideal revenue streams for people who still want to embrace the flexibility of retirement.
Turn Hobbies Into Income: Retirement can be the perfect time to turn passion projects into jobs. If you’ve always wanted to be an artist, start selling your paintings to local galleries. Great at knitting sweaters and socks? Open an Etsy shop or get a stand at a craft market. You’ll get to make money doing the things you love the most. But keep in mind, even when you’re just running a side business, you need to pay your taxes properly. Structuring your small business as an LLC is one way to ease the stress at tax time. It’s a smart idea to start this process early and avoid potential pitfalls by registering an Oregon LLC through an affordable online formation service.
Adjusting to a fixed income isn’t always easy, but give yourself time to make the transition. By building a budget, sticking to spending goals, and finding ways to reduce costs, you can make a fixed income’s inherent stability work for you.
Need a ride? Dial-A-Bus can get you there. Call (541) 752-2615 for assistance.
Photo Credit: Pexels
This article was written by Beverly Nelson with standupforcaregivers.org