Running out of money in retirement is pretty much a nightmare scenario. But given that 42% of Americans have less than $10,000 in long-term savings at present, it's a very real risk. If you're less than confident about your nest egg's lasting power, then it pays to take steps to boost your retirement income in other ways. Here are a few options to consider.
1. File for Social Security at age 70
Your Social Security benefits are calculated based on the amount you earn during your top 35 working years. If you file for benefits at your full retirement age, which, based on your year of birth, is either 66, 67, or 66 and a number of months, you'll collect the full monthly benefit your earnings record entitles you to. But if you hold off on taking benefits past full retirement age, you'll boost them by 8% a year up until age 70. This means that if you're looking at a full monthly benefit of $1,500 at 67, waiting until 70 will increase that payment to $1,860 -- for life.
2. Invest in dividend stocks
Tempting as it may be to dump your stocks when you're older in favor of safer investments, like bonds, it pays to hold on to some dividend stocks in retirement. If you invest in solid companies with a long history of paying dividends, you'll be in a good position to collect those quarterly payments throughout retirement, which you'll then be free to use as you please or reinvest for additional growth. Best of all, dividend stocks can serve as a hedge against market volatility. Even if the stock market on a whole has a bad year, your portfolio might still do well if it has strong enough dividend payers.
3. Buy an annuity
An annuity is a contract between you and an insurance company. In exchange for a certain amount of money, the company issuing your annuity agrees to provide you with a guaranteed income stream for life. Annuities aren't for everyone because they're fairly complex and can come with some rather expensive fees, but if you have a string of years in which you've maxed out your 401(k) or IRA contributions and still wish to save for retirement, you might consider putting that excess cash into an annuity so you can enjoy the payout later on.
4. Start a business
If you ever dreamed of starting a business during your working years but were afraid to take the leap, doing so in retirement is a good way to not only generate extra income but fulfill a lifelong goal. Interestingly enough, seniors 65 and older are more likely to be self-employed than any other age group, according to the U.S. Bureau of Labor Statistics, so if you do decide to embark on a new venture after closing out your full-time career, you'll be in good company.
5. Monetize a hobby
The beauty of being retired is getting to spend your days the way you want to, and for many seniors, that means diving into hobbies that may have previously fallen by the wayside. But aside from serving as a meaningful way to fill your time, exploring hobbies is also a great way to boost your income when you're older. These days, you can turn just about any hobby into a business venture, whether it's baking, crafting, or gardening. And while your hobby may not end up being the biggest moneymaker out there, it could serve as a good source of leisure cash, which is nothing to scoff at.
The more money you have available to you in retirement, the less stress you're apt to encounter. Even if you're approaching your golden years with a healthy level of savings, it never hurts to explore a wider variety of income streams. This way, you'll get to enjoy retirement to the fullest without having to worry as much about paying the bills.