Running short of retirement savings can be really frightening for seniors. While Social Security benefits are guaranteed for life, they aren't enough to live on. This means older Americans will find themselves in a tight spot without supplementary income.
If you find yourself facing a situation where you're afraid your nest egg may run dry, it's important to make some major lifestyle changes ASAP.
The good news is, there are ways you can salvage your retirement if you take action. These three drastic moves could make all the difference in ensuring you have enough money even if you don't have a fortune in the bank.
1. Downsize your home
Housing expenses are one of the main cost seniors face. And if you still live in your big family home, the cost of maintaining your residence may eat up a huge portion of your monthly income. That's true even if you no longer have a mortgage, since you'll still have property taxes, insurance, utility bills, and maintenance expenses.
Whether you're a renter or homeowner, moving to a smaller place could free up a lot of money in your budget and potentially help you preserve what's left of your nest egg. This is especially true if you do have your own place, as the sale of the property could possibly produce enough money to allow you to buy a smaller place mortgage-free -- and maybe even put some extra cash into your investment accounts.
2. Move to a place with a lower cost of living
You may not want to stop at moving to a smaller home if you have concerns about your financial security as a senior. Since there's a wide variation in how much necessities cost in different parts of the country, relocating to another state could also be one way to make your money last longer.
If you happen to live in a very costly part of the country, spending on the basics will likely eat up all of your Social Security income, and you'll still need to withdraw a lot from savings each year to cover the necessities. But a move to a cheaper place could make it possible to take far less out of your investment accounts, thus preserving your nest egg for the future.
Just be sure to research the quality of living, healthcare services, weather, and tax rules for any place you plan to move to ensure you're happy there as well as financially secure.
3. Eliminate a vehicle
Finally, transportation expenses are also a big part of most seniors' budgets. And they can be cut dramatically by getting rid of a vehicle when it's possible to do so.
If you're living with a retired spouse or partner, there's a very good chance you could get by with just one car once neither of you have to commute to work. If you're a single-vehicle household already, giving up your only car could be more of a challenge but may still be a viable approach to preserving your nest egg, depending how walkable your area is and if there's public transportation.
Ultimately, each of these three changes would mean a major shift in your lifestyle, so you'll need to think them through carefully. But it's better to make a big move before you run out of cash so you can save as much as possible for the future rather than spend now and be forced to make changes later because you're broke.