6 Bills To Revisit When Social Security Payments Start
Starting Social Security can change your income and your daily expenses, especially if it coincides with retirement. Bills tied to commuting, workplace routines and an earlier stage of life may no longer justify their cost.
Before cutting indiscriminately, review these six expenses for savings while protecting the coverage and services you still need.
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1. Outdated Medicare and Health Insurance Plans
Medicare coverage, supplemental insurance and prescription drug plans should be among the first bills new Social Security recipients review, according to James Morgan, a retirement expert and founder of FinanceCompassPro.com.
“Once Medicare becomes the primary coverage, many retirees are still paying for supplemental policies or drug plans they signed up for years ago without re-shopping them," he said. "Premiums and formularies change every year, so a plan that was the cheapest option three years ago may no longer be."
Reviewing health insurance does not necessarily mean dropping coverage. Gregory DuPont, attorney, certified financial planner (CFP) and founder of Advocate Wealth Solutions, warned against cutting health coverage, long-term care planning or home maintenance, as “deferring any of these can lead to a much larger bill later.”
2. Auto Insurance Based on Your Former Commute
Retirement can substantially reduce the number of miles someone drives, particularly if a daily commute disappears. Social Security recipients should ask their insurer to update their estimated mileage, check for low-mileage or retired-driver discounts and consider whether the household still needs a second vehicle.
Both Morgan and DuPont also recommended reviewing any recurring insurance tied to a former commute or work life, like a second car policy.
3. Life Insurance That No Longer Serves Its Original Purpose
Not all life insurance is necessary forever. Any purchased to replace employment income, pay off a mortgage or support children may not be needed once those obligations change. DuPont said, “Depending on your goal with the policy, it might have outlived its purpose. I've had clients paying premiums for years on coverage, protecting a need that no longer exists.”
Before canceling a policy, however, consider beneficiaries, debts, final expenses, estate-planning goals, the policy’s cash value and whether dropping it would create tax or surrender consequences.
4. Unused Streaming and Subscription Services
Streaming platforms, apps, publications and other recurring subscriptions can consume too large a chunk of a fixed monthly income. Morgan said it’s common for retirees to end up subscribed to multiple platforms. “but realistically watch content on one or two.”
Libraries often offer free movie downloads or DVD rentals, and senior discounts can often be found for entertainment, as well.
5. Warehouse Club and Other Membership Fees
A Costco, Sam’s Club or similar membership may stop paying for itself if a retiree’s household becomes smaller or buys fewer products in bulk. Morgan said, “They only pay off if the household is still buying in the volume that justified the fee in the first place, and spending habits often shift after retirement.”
He did caution against cutting any membership tied to healthcare savings, like certain AARP-affiliated programs, since the discount value there can exceed the membership fee itself.”
6. Overpriced Housing and Utility Bills
Housing expenses may not be easy to eliminate, but Social Security recipients could reduce them through senior property tax relief, utility discounts and other assistance programs.
DuPont said that property tax relief for seniors exists in most states, “and it's routinely unclaimed because nobody applies.”
Morgan added that utility companies in most states also offer low-income or senior discount programs, but they're rarely advertised. “[They] usually require a phone call or application, not automatic enrollment,” he said.
Look for Discounts Before Cutting Essential Coverage
Always attempt to negotiate or apply for discounts before eliminating services, Morgan said. An annual review of insurance, utilities and recurring charges can uncover savings without exposing retirees to greater financial risk.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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