Social Security pays the typical senior $1,543 a month, but it's possible to get more money out of the program. In fact, the maximum benefit you can collect this year is an impressive $3,895 a month.
But most seniors don't get anywhere close to that amount, and if you want to live comfortably in retirement, you'll probably need more income than what the average beneficiary collects. Here are a few income sources that could end up paying you much more than a Social Security benefit.
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1. Retirement plan withdrawals
If you save diligently throughout your career and invest your savings wisely -- namely, by loading up on stocks -- you might retire with a massive pile of cash. And at that point, the withdrawals you take from your retirement plan could well exceed your Social Security benefit.
Imagine you manage to retire with $1 million. If you follow the 4% rule, you'll get $40,000 of income per year, or $3,333 per month, which is more than double what the average Social Security recipient gets today.
2. Income from a business or job
Many seniors work in retirement to stay busy and earn money to supplement their Social Security benefits. But if you're successful enough, you might earn enough to surpass your monthly benefit payment.
Imagine you spend your career as a marketing consultant and decide to start your own part-time venture once you retire. You might easily bring in thousands per month if you're able to command a high-enough rate and are willing to put in the time.
Or you might want to try something completely new in retirement -- say, opening a catering business or starting a pet-sitting service. You never know how much earning potential you might have, and if you go in with a solid plan, you might easily outpace the monthly benefit Social Security pays you.
3. Rental income
Depending on where you live and the type of property you own, you may be able to command enough rental income to beat out your Social Security paycheck. And the best part? You don't necessarily have to own a separate property to enjoy a healthy rental income stream.
If your primary home has a finished garage or basement and your local zoning laws allow for it, you can welcome a tenant into your home and boost your income on a monthly basis. You may even be able to take in multiple tenants, depending on the setup of your property.
4. Dividend payments
If you assemble an investment portfolio that's loaded with dividend stocks, you could set yourself up for a steady stream of payments that total more than what Social Security provides. One thing you should know is that dividends generally pay quarterly, not monthly. But seeing as how there are some companies out there with a dividend yield of 7% or higher, you could take in quite a lot of money with a strong enough collection of stocks.
That said, you don't necessarily want to load up on stocks with the highest dividend yields out there. When stock prices fall, yields can climb, so generous dividends can be deceiving. A better bet may be to focus on companies that have consistently paid strong dividends over time.
Though Social Security may end up paying you a fair amount of money during retirement, you can generate a lot more income outside of it if you play your cards right. And that way, you'll really be able to enjoy your senior years to the fullest.
