If you’re nearing retirement age (or are there now) and don’t feel like you’ve saved enough to live comfortably, you may think you have limited options to improve your financial situation. But that simply isn't the case.
While you’re probably not going to make a massive change in your finances, short of a windfall like winning the lottery, there are plenty of things you can do to ensure you’re bringing in enough monthly income to live comfortably.
Here are six ways you can boost your income in retirement.
1. Make catchup contributions to your 401(k) & IRA
At 50, you can increase the amount you contribute to both your 401(k) and IRA. For 2018, you can contribute an additional $1,000 to your IRA, up from $5,500 to $6,500; and an additional $6,000 for 401(k) contributions, up from $18,500 to $24,500. If you have the money and aren’t already maxing out your contributions, it’s a good idea to start now.
2. Find a second act
Maybe you love writing about your travels, or photographing landscapes. Instead of focusing on just retiring from your current role, it makes sense for a lot of people to turn their passions into income in retirement. Have you always wanted to open a hardware store? Be a dance instructor? A food critic? Help kids learn to read? Whatever you're interested in, there’s a good chance you can figure out a way to earn money doing it.
If you pick up a side hustle, make sure you read up on this money mistake most side hustlers make (& how to avoid it).
3. Think about your housing needs
Many folks “downsize” by moving into smaller homes when they retire. Some even trade it all in for a recreational vehicle so they can live wherever they choose as the mood hits them — and save on property taxes. Whether you rent or own, determine whether your current home is really suited to your retirement years. Don’t forget to consider maintenance costs, utilities, homeowners insurance and property taxes.
4. Go Golden Girls ...
While you’re considering housing, maybe it’s worth thinking about shared living. If you have a great group of friends you think you could share a home or even a multi-unit property with during retirement, it can be a great savings for everyone involved. Plus it comes with a built-in companionship and support network.
5. ... or become a landlord
If a portion of your house could be renovated for income property (like your garage or a second living area) the upfront investment could be worth it when you figure the income it will provide during retirement. Certainly you’ll need to crunch the numbers, but a little extra space could end up being just the additional income you’re looking for.
6. Consider a fixed or deferred annuity
Stock market investments during retirement can be volatile and stressful. If the idea of your portfolio moving up and down on as little as a politician’s Tweet is more than you want to think about on a fixed income, annuities can provide much more peace of mind. These vehicles will pay you a set amount for the rest of your life beginning at the time you purchase them or on a deferred basis. Talk to a financial advisor to better understand your options.