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Don't Have Enough Retirement Savings? 3 Ways to Salvage Your Senior Years

By Maurie Backman - Jan 26, 2020 at 11:02AM

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Here's what to do if your nest egg is clearly falling short.

Ideally, you should close out your career with 10 times your ending salary socked away for retirement. In reality, many older workers are worlds away from reaching that milestone.

More than 50% of Americans in their 50s, and 38% of those in their 60s, have less than $100,000 saved for retirement, reports TD Ameritrade. That's not a great spot to be in, especially if you're an above-average earner who's used to living on more.

The good news, however, is that all isn't lost if you're nearing retirement with inadequate savings. There are a few key things you can do to overcome that obstacle and eke out extra income.

Older man resting hand on chin and putting arm on older woman's shoulder; both looks serious as they sit across from another person


1. Delay your Social Security benefits

Your Social Security benefits are calculated based on your earnings history, and you're entitled to your full monthly benefit once you reach full retirement age. If you were born in 1960 or later, that age is 67. Otherwise, it's either 66, or 66 and a specific number of months.

The Social Security Administration won't force you to claim benefits at full retirement age, though. In fact, it will actually reward you for waiting. For each year you hold off on filing past that point, you'll boost your benefits by 8%, up until you turn 70. This means that if you're entitled to a monthly benefit of $1,500 at age 67, waiting until 70 to claim it will give you $1,860 a month instead. That's an extra $4,320 a year to help make up for a lack of retirement savings.

2. Get a part-time job during retirement

Many people associate retirement with not working, but actually, it's a great time to hold down a job. For one thing, having too much free time on your hands and nowhere to go every day can lead to boredom and isolation, so working several hours a week for a local business is good way to get out of the house. But also, having that extra income could help compensate for limited savings.

Imagine you're able to earn $20 an hour doing bookkeeping for 10 hours a week. That's an extra $10,000 a year (assuming you take a couple of weeks off).

You can also try starting your own business in retirement, or finding a flexible gig you can do on your own terms. If you have a car, you can drive for a rideshare company when it's convenient for you. Otherwise, you can sign up to pet-sit, house-sit, or consult in your former field if it's work you enjoy doing.

3. Monetize your home

If your mortgage is paid off before you retire, selling your home is a good way to access a lump sum of cash. There's just one problem with that scenario, though -- you'll still need a place to live.

A better solution, therefore, could be to become a landlord in some capacity, and you have several options in this regard. First, you can rent out part of your living space on a long-term basis if you have a finished basement or garage, or an in-law suite. Secondly, you can rent out your home as a vacation spot if you don't want a permanent tenant. This option is especially viable if you live near major attractions, and as a bonus, if you rent out your home for 14 or fewer days in a single year, you won't be liable for taxes on that rental income.

Let's say you go the second route and rent out your ski resort-adjacent home for four separate weekends during the year. If each weekend brings in $1,200 in rental income, that's $4,800 for you to keep, since the IRS can't touch it.

It's best to enter retirement with as much money in savings as you can scrounge up. But if you're clearly behind in that regard, and you know you don't have much time to catch up, then start strategizing about ways to compensate. With any luck, you'll boost your income enough to avoid financial struggles later in life.

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