Retirement is a scary notion for some seniors, not because it means getting older, but because it means moving over to a fixed income with little financial wiggle room. If you're concerned about having enough money in retirement, here are a few things you can do to scrounge up extra cash.
1. Hold off on filing for Social Security
Your Social Security benefits are calculated by taking your average wages, adjusted for inflation, over your 35 highest-paid years in the workforce. Once your monthly benefit is determined, you can begin collecting it in full once you reach full retirement age. That age is either 66, 67, or somewhere in between, depending on the year you were born.
But if you hold off on filing for benefits past full retirement age, you'll boost your monthly payments by 8% a year, up until you turn 70. And that increase will remain in effect for the rest of your life.
2. Get yourself a part-time job
Many people associate retirement with not working, but actually, it's a great time to hold down a part-time job. This especially holds true if you're used to working a full schedule, because you may appreciate not only the extra money but the added structure, as well.
Best of all, you don't have to spend your free time in retirement working a job you can't stand. Rather, you can start your own business or monetize a hobby you're already dedicated to, like gardening, woodworking, or cooking.
3. Buy dividend stocks
Seniors are often advised to favor safer investments, like bonds over stocks. But if you buy dividend-paying stocks issued by solid, proven companies and hold them for years, there's a good chance you won't lose money in the stock market.
At the same time, you'll benefit from ongoing dividend payments (typically paid quarterly) that give you access to more money during your senior years. Of course, dividend payments aren't guaranteed, but companies with a strong history of making them are likely to continue doing so.
4. Rent out your home
If you're sitting on a large property in retirement but don't want to downsize to a smaller space, you can put that extra square footage to good use by renting out a portion of it. This is especially feasible if you have a finished basement or garage that gives a prospective tenant some privacy.
If you're interested in bringing in rental income but don't want to take on a full-time tenant, you can instead rent out your home seasonally or on random weekends. And if you rent out your home for 14 days or less within the same calendar year, you'll avoid taxes on the rental income you collect.
5. Cash out some or all of your life insurance
If you have a permanent life insurance policy that's accumulated a cash value, it can serve as a source of income when you need it. Of course, the more money you take out of that policy, the lower the death benefit paid to your heirs will be upon your passing. But if your beneficiaries are no longer as reliant on that policy as they once were (for example, if your kids are now grown with incomes of their own), then that may not be such a bad thing.
If your savings aren't robust enough to sustain a spending level that buys you a comfortable retirement lifestyle, then you'll need to consider employing these and other tactics to boost your income. Thankfully, you have plenty of options for increasing your personal cash flow, so weigh your choices and see which make the most sense for you.