Retirement shouldn’t mean struggling to make ends meet. Discover practical solutions to secure your finances while enjoying life after 65.
At age 65, relying solely on Social Security and savings will not sustain your lifestyle. Here’s how to bolster your retirement income.
Increase Your Income Through Part-Time Work
Consider earning additional income by taking on part-time or full-time work. Your current Social Security benefits, amounting to $1,700/month, can be supplemented by working.
If you haven’t reached the full retirement age of 67, be aware that there are earnings limits that can affect your benefits. For example, the threshold will be $23,400 in 2025, meaning you would lose $1 in benefits for every $2 you earn above this limit. However, any lost benefits will be recalculated once you reach full retirement age, which means working may provide a higher Social Security payout in the long run.
Tap into Home Equity for Financial Flexibility
Homeowners have another powerful tool at their disposal: home equity loans. With the average homeowner sitting on $311,000 in equity as of Q3 2024, this option could cover unexpected expenses or provide cash flow for investments.
Lower interest rates on HELOCs or home equity loans compared to credit cards make this option attractive. Consider contacting LendingTree to compare rates from different lenders quickly and easily. Accessing cash from your home equity might help you fund renovations or even create a safety net for your retirement.
Invest Smartly with Real Estate
Real estate provides a pathway to passive income, even for those with limited capital. Platforms like Arrived allow you to invest in vacation rentals or rental properties starting with as little as $100. This is an appealing alternative to managing properties yourself.
As a shareholder in rental properties through Arrived, you can enjoy potential quarterly dividends and increase your cash flow without the challenges of landlord duties. The controlled investment allows for participation in the lucrative real estate market, which can be particularly attractive when cash flow is needed.
Make the Most of Small Investments
Consider using apps like Acorns, which allow you to invest spare change from purchases automatically. For example, buying a donut for $3.25 will lead Acorns to round up the amount to $4 and invest the 75 cents in a diversified portfolio. This small but continuous investment strategy can accumulate significantly over time, enhancing your retirement savings. Plus, new users can enjoy a $20 bonus investment when signing up.
Cost-Cutting Strategies for Retirement
Reducing expenses is crucial if increasing income isn’t an option or if home equity isn’t available. While relying solely on Social Security can seem challenging, implementing cost-cutting measures can ease some burdens.
- Lodging Costs: Consider moving to a more affordable location instead of reducing many small expenses. This strategy allows you to manage your budget without sacrificing comfort.
- Transportation Expenditures: Car ownership can cost approximately $12,297 per year, with insurance averaging $2,149 annually. Shop around using platforms like OfficialCarInsurance.com to find lower rates; within minutes, you could save significantly on your monthly insurance premium.
Seek Expert Financial Guidance
Leaving money management to chance can lead to financial worries later in retirement. Financial advisor services are a viable solution for tailoring your strategy to your unique situation. Trusted platforms such as Advisor.com connect you with vetted advisors who can guide you through potential income sources and assist with budgeting.
Simply answer a few questions about your finances, and the platform will match you with the right expert, offering you personalized support to help your retirement savings last.
Embrace Multiple Strategies for Stability
Accumulating income in retirement may require a multi-faceted approach combining increased work, leveraging home equity, and smart investments. Each method contributes to a more stable financial future without sacrificing your lifestyle.
For a secure retirement, address both income increase and cost reduction strategies. While managing a limited nest egg can be daunting, alternative solutions exist to support a fulfilling lifestyle while safeguarding against financial decline. Implementing these strategies effectively can provide the financial flexibility you need to enjoy retirement worry-free.