Medical Costs Could Outpace Social Security's COLA in 2024. Here's How Retirees Can Cope.

Retirement should be a time to enjoy the fruits of a lifetime of labor. Some like to travel, dedicate time to hobbies, volunteer, buy a vacation home, or just enjoy carefree leisure time. But too often, money worries stifle the enjoyment.

According to a Motley Fool study , 62% of retirees rely heavily or exclusively on Social Security for income. This makes the annual cost-of-living adjustment (COLA) critical as prices rise. Unfortunately, a whopping 82% of those surveyed believe the 3.2% increase this year helped little or not at all when it comes to essential expenses. Medical costs are a huge reason why.

The COLA is based on the Consumer Price Index (CPI), which measures broad-based price increases in goods and services. However, medical costs (which disproportionately affect retirees) rise much faster. Since 2000, medical care prices have increased 120% versus 85% for other goods and services, as shown below.

U.S. Consumer Price Index: Medical Care data by YCharts.

Rising expenses can make budgeting in retirement challenging. Here are some tips to keep living your retirement dreams.

Put idle cash to work!

As we age, it's wise to move to less risky investments. This generally means holding fewer stocks and more fixed-income investments. Luckily, it's the best time in years to get a solid return on bonds , CDs , U.S. Treasuries , or high-interest savings accounts. Thanks to the Federal Reserve maintaining higher rates to curb inflation, it's common to find these low-risk investments yielding over 5%. As shown below, yields on corporate bonds are the highest since the beginning of 2010.

U.S. Corporate A Effective Yield data by YCharts.

Note that AAA-rated bonds have the highest possible credit rating, while AA- and A-rated bonds are also considered safe investments.

Bonds typically pay interest semi-annually, so use that money to pay bills, reinvest in fixed-income vehicles, or stash it in a high-yield savings account to earn interest.

Trim the fat and earn income

Retirees are cutting back on non-essential spending to balance their budgets, according to 71% of the people surveyed. Here are some ways to trim the fat in your budget by eliminating expenses you won't miss.

Let's start with those unused subscriptions that tend to pile up. If you are like me, you may have suddenly realized you were up to four streaming services. Forgetting to cancel free trials or subscribing to watch one show or event and not canceling afterward are reasons that these can pile up. Take stock of what you have, what you use, and what you value. Ditch the rest.

There are other budget killers as well. For my fellow coffee drinkers: If you spend $5 per day at a coffee chain, this will run $1,825 a year -- as much as an entire Social Security payment for some recipients. Instead, consider purchasing high-quality beans from a local roaster and investing in a coffee grinder. Not only is it much more affordable, but the coffee tastes fantastic.

Part-time work is also an option. With unemployment historically low, many businesses look to lure folks out of retirement. Working part-time doing something like bookkeeping, pet sitting, gardening, or even driving for Uber or Lyft is flexible and enjoyable, depending on the person's skills and interests.

If history is any guide, medical costs will continue to outpace Social Security COLAs, straining many retirees' budgets. Consider the steps above to alleviate some of the burden.

Bradley Guichard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy .