Make It On a Retirement Income

4 Things You Can Do When Your Retirement Savings Just Aren’t Enough

Mature man smiles at wife who is looking up at him as they enjoy time together in the backyard of their home

Experts tell us that our retirement savings goal should total 80% of our annual income for 30 years. For some of us, that’s over a million dollars!

Many things can get in the way of our ability to save that much. Sometimes we’re paying back student loans well into middle age, or we have unforeseen emergencies or healthcare expenses, or we experience inconsistent employment, to name just a few common examples.

Social security provides some level of income, but most experts agree that it won’t be enough—especially if your vision of retirement includes travel and leisure. The average social security amount in 2017 was only $1460 per month.1

Without sufficient savings in place, your actual retirement lifestyle may look a bit different than you expected.

Fortunately, if you haven’t been able to save enough in a retirement account, there are other options you can turn to in order to help you boost your retirement income.

1. Work Part-Time

Working during retirement years is a reality for many people. Whether it’s to earn a supplemental income or for fun, seniors are remaining in the workforce much longer—a trend that the U.S. Department of Labor projects will increase.

If you don’t want to work full-time after retirement, there are plenty of part-time options. Here are some occupations most heavily populated by seniors:

  • Curators, archivists and museum technicians
  • Bus drivers
  • Furniture finishers
  • Proofreaders
  • Medical transcriptionists
  • Real estate brokers and agents
  • Tax preparers
  • Travel agents
  • Other popular options for part-time employment for retirees include:
  • Coaching and refereeing
  • Classroom assistant
  • Tour guide
  • Library assistant

Additionally, today's evolving “gig economy” offers many opportunities to work as a freelancer or consultant. If you have a specialized skill in demand, this may be a great way to earn an income and keep a flexible work schedule.

Pro-Tip: If you start working again after your social security benefits kick in, you could risk a reduction in benefits if you earn over a designated income amount (in 2020, it was $18,240). Check with the Social Security Administration for the most current information on work limitations post-retirement.

2. Lean on your Health Savings Account

A health savings account (or HSA) is a special savings account you can open to help pay for health expenses if you have a high deductible insurance plan (a deductible of $1,350 for an individual and $2,700 for a family plan)1. You make pretax contributions to your HSA account each paycheck and then draw funds from the account when you need to pay for medical expenses. As long as you use the funds to cover approved medical expenses, you won’t be taxed.

Help with non-medical expenses

HSAs are helpful in covering medical costs, but what many people don’t realize (or take advantage of) is that HSAs can also be an investment tool that you can use to pay for expenses in retirement.

3 Reasons why HSAs are a great investment

1) HSAs are tax-friendly. Contributions made from payroll deductions are tax deductible and those made directly can reduce your federal and state taxes. Further, HSA accounts grow tax-free and withdrawals made for medical expenses are not taxed.

2) HSAs have healthy contribution limits: Individuals can make contributions of $3,550 a year to their HSA accounts (for families, it’s $7,100). At age 55, you can contribute an additional $1000 a year. You can make contributions to your HSA up until you turn 65.

3) HSAs offer flexibility: HSA balances are carried over every year. If you switch employers, the account will move with you. If you don’t want to use your HSA funds for medical expenses and you are 65 or older, your withdrawals will be taxed as income.

3. Relocate

Ever wonder why Florida is considered the retirement capital of the United States? Sure, the abundant sunshine is appealing, but that’s not the only reason. Florida has long been considered a great place to retire because of the moderate cost of living and low taxes, but it doesn’t make the cut for most affordable places to retire. For those on a tight retirement income who are considering relocating, AARP's latest list of the 10 cheapest places to retire1 is currently split between midwestern cities like Detroit, MI and Akron, Toledo and Cleveland all in OH, to smaller cities in the south like Memphis, TN, Birmingham, AL, Jackson, MS and Brownsville, TX.

And, if you’re up for an even bigger post-retirement adventure, you could consider joining the 500,000 retirees who live outside the United States.1 Many countries are far more affordable, have a strong community of retirees, and provide quality healthcare for seniors. Retired expats (people who move out of the United States) usually still receive social security benefits, but they are no longer eligible for Medicare.

According to International Living, Costa Rica is the most retirement-friendly foreign locale because of its low cost of living, affordable healthcare and, of course, breathtaking beaches2. The full top 10 list includes several other Central and South American countries, but also Spain and Portugal in Europe, and even Malaysia in Southeast Asia.

4. Downsize

If moving isn't part your plan, another great way to free up some extra funds during your retirement years is to downsize. Downsizing may reduce your cost of living expenses (such as property taxes, heat/ac, maintenance costs, etc.), provide you with spending cash, and help you live more modestly and with more freedom from “stuff.”

Sell what you don’t use: If something has been sitting in your closet or attic for years and it doesn’t hold sentimental value, consider selling it. Hold a garage sale or sell the items online.

Get a smaller place: If you’re still paying mortgage on a larger home, think about moving into a smaller place in a less expensive neighborhood—but only if it reduces your mortgage and/or tax bills.

Sell your car: If you own more than one vehicle, consider whether you really need the extra vehicle. Selling your vehicle may reduce your debt and insurance payments and will free up some cash.

Create a post-retirement budget: Take a good look at the income you’ll be bringing in from your retirement funds and social security and see how well it covers your current expenses. Then, go through your expenses and find places where you can cut costs. Even small adjustments in your living expenses can make a big difference over time.


This article is for informational purposes only and is not intended for use as legal, accounting, tax or professional financial advice by People’s United Bank or any of the bank’s subsidiaries. Financial calculators are for illustrative purposes only. Always consult your legal, accounting and/or tax advisor to fully understand how information may or may not apply to your personal or business financial situation.

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