We're told time and time again to save independently for retirement, and thankfully, the majority of baby boomers have listened. An estimated 58% of older workers have money set aside for their senior years, according to data from the Insured Retirement Institute. Furthermore, 43% of baby boomers have $250,000 or more socked away, which means they have a good shot at living comfortably once they stop working.

At the same time, only 22% of baby boomers expect the majority of their retirement income to stem from a 401(k). This means a large chunk of older workers are no doubt counting on Social Security to help pay the bills once their careers come to a close. And that's a fairly dangerous prospect.

Older man reading a book while standing next to shelves of books

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Social Security alone won't cut it

Many older workers assume that Social Security will cover most, if not all, of their retirement expenses. But that's a misconception that could hurt them.

In a best-case scenario, Social Security will replace about 40% of the typical worker's pre-retirement income. Most folks, however, need roughly double that amount to pay the bills in retirement, and these aren't the people who expect to travel the globe and frequent the theater. Rather, that 80% is what many seniors will need to pay for their basic living costs, like housing, food, transportation, and healthcare. And to think that Social Security will pick up the bulk of that tab means setting yourself up for disaster.

Making up for not enough savings

Let's be clear: A 401(k) isn't the only retirement-savings tool out there, so while only 22% of seniors think their future income will come mostly from an employer plan, that doesn't mean some of those folks don't have another income source to tap, like a pension or IRA. On the other hand, if you're older and don't have much savings, you can't make the mistake of sitting back, doing nothing, and waiting for Social Security to work its magic. That's just not going to happen.

So what can you do if you're nearing retirement and don't have much money set aside in your 401(k) or another type of account? For one thing, you can plan on working in some capacity once your full-time career ends. While this option may not seem ideal at first, remember that you don't need to plug away at a boring job to generate that income when you're older. Rather, you can use retirement as an opportunity to start your own business and do something that makes you happy.

Maybe you're an avid baker and have always wanted a shop of your own. Or maybe you love picking out furniture and want to try your hand at freelance interior design. No matter your passion, retirement is a great time to pursue it, all the while generating the income you'll need to make up for your lack of savings.

Another option you might look into is monetizing your home. Many seniors choose not to downsize for a number of reasons, whether it's wanting the option to host guests or the desire to stay in the neighborhoods they know. But if you're sitting on a larger property, you have a great opportunity to turn it into an income stream.

For one thing, you can see about getting a full-time tenant, which is feasible if you have a separate basement or garage that allows for privacy. You can also try renting your home out seasonally, especially if you live near popular attractions. You might even consider converting your home to a bed and breakfast. Granted, that's a lot of work, but some folks find it rewarding to meet travelers and interact with a constant stream of new people.

No matter what steps you take to come up with more retirement income, if your 401(k) or another account isn't enough to cover at least half of your senior living expenses, then you'll need to compensate somehow. Social Security is valuable in its own right, but it won't pick up the slack where your savings leave off. The sooner you recognize that, the better positioned you'll be to come up with an income-generating plan that works for you.