How to Retire Only on Social Security

Aug 16

How to Live on Social Security Alone: $1500 or Less Per Month

Whether you are already retired or planning to in the next few years, many in our generation are trying to figure out what life would be like on a fixed income.

Are you sheepish that this is your plan moving forward? Please don’t be. It is estimated that 22 million seniors live off of Social Security alone. And 75% of all retirees use Social Security to make up at least half of their monthly income.

As of this posting, the overall average Social Security check for retired workers in the US is $2076/month. This amount covers basic necessities but only if you have no debt, low housing costs, and live very frugally.

This $24,900 a year is still above the federal poverty line, but it leaves very little room for any type of emergency. Nearly the entire amount will be needed for housing, healthcare, and food.

Is your estimated check lower than $2076/month? This average amount can be deceptive as it contains higher wage earners, as well as those that waited to retire at the full age of 67 or at delayed retirement age 70. The best thing to do is head over to SSA.gov and check out what your projected income will be for age 62, 67, and 70.

For the purposes of this discussion, let’s stick to $1500/month. Retiring on $1500/month is possible if your housing costs are eliminated (you own your house), you cut down costs by living with family or roommates, move to an affordable region of US, or even consider international options.

Can you live off of Social Security with a home free and clear?

This used to be the norm for our parents’ generation. You pay off your home and with a fixed income and a moderate level of savings, you could get by. These days, costs associated with housing have jumped 26% which makes this plan more of a struggle. The main culprits? High costs associated with utilities, home insurance, maintenance, and property taxes.

Currently there are only ten states that have living expenses low enough to be covered by the average Social Security check:

Delaware
Indiana
Arizona
Utah
South Carolina
West Virginia
Alabama
Nevada
Tennessee
Michigan

The main difference between affordable states and unaffordable states comes down to the costs of housing. The Department of Housing and Urban Development recommends that retirees spend no more than 30% of their income on housing related costs.

If you know how much your Social Security check will be, take 30% of that and compare it with your current housing costs. If you own your home free and clear, you will have a better chance at hitting the mark. Renters will have a much more difficult time doing so.

What type of housing are you living in?

Your housing situation will be the largest factor in determining whether or not you can retire only on Social Security.

If you own your home free and clear, great! There are still property taxes, HOA fees (if applicable), maintenance/repairs, home insurance, and utilities. Only you know how much that total is on a yearly basis. Ask yourself if you need all of the space that you have. Could you downsize to a smaller home and put the balance into your savings account? Could you rent out a vacant bedroom to a tenant? Could you rent out to entire home to a family and move someplace less expensive? Choose tenants wisely so you don’t end up in small claims court with a nightmare.
Are you renting? The property taxes, insurance, HOA fees, and repairs mentioned above no longer apply to you. But rent can be pricey. Can you get a roommate and split costs? Does the rent include utilities? That would help.
Could you purchase a mobile home? Then you would just pay for lot rent and utilities. What about an RV? What about van life? You could take your show on the road and enjoy different parts of the US. Note: This option is only economically viable if gas prices are reasonable.
Know that there are agencies that you can reach out to for help. Consider applying for senior assistance with your local housing authority for income-based senior apartments and subsidies. There are also government programs like SNAP (food stamps), Medicaid, and extra help for prescription drugs. If you can save in certain areas of your monthly budget, you may be able to creep above the recommended 30% on housing costs.

You may have to get very creative with your housing solutions in order to retire on Social Security alone. At the end of this article, I will give you a couple of examples of how recent retirees have found unique ways to make ends meet.

Where is retirement most affordable?

Where you live with your $1500 per month will play a big part in determining whether your daily life is comfortable or a struggle.

In the United States: Consider Arizona as it is already set up for low cost living. There are very low property taxes and many amenities for the retired. Certain mid-sized cities in the Midwest or the South have cost of living significantly below average. Consider Wichita, Kansas, Toledo, Ohio or Fort Wayne, Indiana in the Midwest. For Southern cities look at Hickory, North Carolina, Huntsville, Alabama, Spartanburg, South Carolina, and Oklahoma City, Oklahoma. Another option is to look back at your roots and move closer to family. They may have connections in old stomping grounds that can direct you to cheaper housing or they may have a room you could rent out. For some living too near family is a problem itself. I get it, next option.
International Havens: Many retirees stretch their $1500 much further abroad. Popular, established destinations with favorable climates, affordable healthcare, and easily converted U.S. dollar usage include:
- Mexico: By far the most popular destination due to its proximity to the U.S.. Expats can live comfortably on a Social Security check in regions like Lake Chapala, Puerto Vallarta, and Merida.
- Costa Rica & Panama: These Central American favorites are heavily favored for their stable democracies, established retiree visa programs (such as Panama's Pensionado program), and widespread English. Both feature excellent weather and high-quality, inexpensive healthcare.
- Colombia: Cities like Medellin and Pereira offer modern city living, excellent private hospitals, and highly favorable currency exchange rates that stretch a limited budget.
- Thailand: Widely considered one of the most budget-friendly countries in the world. Cities like Chiang Mai and Bangkok offer world-class, affordable medical care. They have an incredibly low cost of living, allowing for a comfortable lifestyle on a very tight budget.
- Portugal: Though more expensive than Southeast Asia or Latin America, Portugal remains the top European destination for lower-budget American retirees. It boasts a mild climate, a high safety rating, and access to an accessible national healthcare system.

No matter what options you choose, your monthly housing cost should be $500-800/month.

Eliminate debt before you retire

If you plan to retire only on Social Security, do everything you can to pay off all debt before you do so. Take on side hustles in the years leading up your retirement to pay off any mortgages, car loans, and credit card debt. Or consider selling a larger house and taking the proceeds from the sale to pay off debt as you downsize your living space.

What freedom could look like

Transportation: You may to need to step away from using a personal vehicle as car insurance, gas, and maintenance will not be in your budget. What about purchasing an e-bike? In some communities, electric golf carts are allowed. If you live close to stores this may be a good option. Think about community rideshare programs, public transportation, and senior transit discounts.
Medical: You are eligible for Medicare at age 65 which covers hospital and medical insurance. As of this writing, the monthly premium is $202.90 per month. There may be co-pays, Advantage plan costs, and drug plans at an additional cost. Go onto the Health Insurance Marketplace (Obamacare) at Healthcare.gov every year to ensure you are getting the best deal. If you upgrade to an Advantage plan there could be benefits that may interest you and be helpful to your budget. Pay attention to the Medicare TV commercials in early fall as annual enrollment begins October 15th. Some plans could include:
- Dental, vision, and hearing
- Over-the-counter allowances (pain relievers, bandages, toothpaste, etc.)
- Gym membership
- Non-emergency transportation to doctor’s appointments or pharmacy (super helpful if you choose to go without a car)
- Healthy groceries allowance
- Credits to pay for household utilities

In our example, $1500/month is equal to $18,000/year income. Medicaid is available with household income up to 138% of the Federal Poverty Level which is about $15,960 per year for an individual in 2026. For a 2-person household it is $2,670 to $2,900 per month (roughly $32,000 to $35,000 per year, states vary with their calculations). Check with your state for specifics.

Also, if you have a medical emergency look into 501 R financial assistance programs that nonprofit hospitals offer lower income patients.

Food: Make most if not all of your meals at home. You may be able to get a budget boost from an Advantage plan groceries allowance. Check out the page on the FAWA site on how to save on groceries. Check out local senior centers and programs that may offer lunches and food pantries.
Entertainment: Let your feral inner child run wild. You already know how to entertain yourself for free or cheap.

Sketch it Out

Put your plan on paper to see what it looks like. Do this before you file for Social Security so you are prepared for the lifestyle switch.

Housing $500-800
Groceries $300-400
Utilities $150-200
Insurance/Healthcare $250
Miscellaneous/Fun $50-100

The tally on the lower side is $1250, the upper side is $1750. The average is $1500 per month. When you simplify life, budgeting becomes very streamlined. You live within your means, you save where you can, and you enjoy your freedom. If you aspire to go on a cruise or take a trip to see friends or family, grab a temporary part-time job or a get a side hustle. Life throws curve balls so it is also good to put money away for a rainy day. You will have to track every expense, stretch every dollar, and get creative. But you get to live life on your terms. If you have a spouse, partner, or roommate there is greater flexibility and savings.

As promised earlier in this article, here are two examples of how retirees are breaking the mold and getting creative with housing costs.

Example 1: You Scratch My Back, I’ll Scratch Yours

Many young families need two incomes to make ends meet these days. Daycare is incredibly expensive, approximately $1000/month per child! One family decided to have their mother/mother-in-law move into their basement in trade for taking care of their two young children during work hours.

During this time, the grandmother was able to strongly bond with her grandchildren, save approximately $1250/month on housing, shared utilities and food costs. This wasn’t a forever decision, but just until both kids were enrolled into Kindergarten.

Over a 5-year period of time, this grandmother was able to save $75,000! She didn’t have to tap into her savings at all and was able to delay filing for her Social Security until she 66.5 years old - an almost 30% increase over the age 62 amount she had been considering.

All of this was during the first half of her green light years (age 62-72) when she still had energy. She felt needed, useful, and closer with her family. Then at age 67, she moved out and redirected her savings towards her bucket list of travel destinations. The lesson: Retirement is more than money. It can be about connection, fulfillment, and family helping family.

Example 2: The Golden Girls Model

There is a growing trend of pooling finances to rent larger homes together, sharing common areas while maintaining private bedrooms and bathrooms. Think back to the show ‘The Golden Girls’: Blanche, Sophia, Rose (Betty White), and Dorothy. Hanging out in the kitchen, occasional clashes, but looking out for each other in the end.

HomeShare Online and SpareRoom are widely used rental platforms that has seen the fastest-growing demographic of roommates shift to the 55–64 and 65+ age brackets, as older adults pool resources. Retirees have said this not only offsets high housing costs, but it also combats isolation. The lesson: Retirement can be about community. We are stronger when we stick together.

Sunshine Home Share Colorado is an example of a state that is helping to find solutions for its state residents. Sometimes it is older adults living together, sometimes the older adult is paired with vetted, younger tenants.

Have you crunched your numbers to determine if you can retire on Social Security alone? How creative can you get to reduce your housing costs?

Renee Walker