You’ll often hear that to retire comfortably, you’ll need to kick off your senior years with some level of savings. In fact, ideally, you’ll manage to end your career with about 10 times your final annual salary socked away in a retirement plan.
But what if that’s just not doable for you? What if constant bills and other expenses prevent you from saving a meaningful sum for your senior years? If that’s the scenario you’ve landed in and you’re right on the cusp of retirement, don’t despair. Here are some options for salvaging your senior years in the absence of having a nest egg.
1. Boost your Social Security benefits
The great thing about Social Security is that it’s designed to pay you for life, and a higher monthly benefit could compensate for a lack of retirement savings. So how do you score a higher benefit? It’s simple: Just delay your filing past full retirement age (FRA), which is the age at which you’re entitled to your full monthly benefit based on your personal earnings history. For each year you hold off on claiming benefits past FRA, they’ll increase by 8%. That incentive is only in play until you turn 70, so if your FRA is 67, the highest raise you can snag is 24%. But still, that’s a good way to boost a pivotal income source.
2. Get a part-time job
Working in some capacity during retirement is a great way to make up for absent savings. That paycheck could cover a number of bills, but just as important, working will give you something to do with your time, thereby preventing you from spending money to stay busy that you can’t afford to shell out. Best of all, in today’s gig economy, working part-time doesn’t have to mean standing on your feet operating a cash register, nor does it have to mean going into an office. You can sign up for a remote job or turn a hobby like knitting or crafting into an income stream.
3. Rent out part of your home
Seniors are often advised to downsize during retirement, but if you have a larger home that’s all paid off and is relatively affordable to maintain (say, your property taxes are pretty low), then hanging on to that home and renting part of it out could be a better bet. That way, you’ll generate regular income to supplement your Social Security benefits.
You might also be able to enter into an agreement where a tenant pays reduced rent in exchange for helping with maintenance and repairs. These tasks might otherwise prove challenging as you age and could be costly to outsource.
Don’t lose hope
Entering retirement without savings isn’t ideal, but it’s a scenario plenty of seniors face. If it’s too late to build wealth in an IRA or 401(k), these solutions could be your backup plan. You may also need to prepare to cut back on spending and keep your expenses to a minimum. But the point is, you don’t necessarily need to wind up cash-strapped because you don’t have money in a dedicated retirement plan at your disposal.
