In past generations, older adults looked to retire with three sources of income: savings, pensions, and Social Security. But no longer. With the decline of company pensions and financial markets taking a hit during the economic downturn, many seniors face less income than anticipated in retirement.
Here are money management tips to boost your income and savings.
Did you know that by delaying the age you start to receive Social Security benefits, you can increase your benefit amount? While today’s retirement age is 66, if you wait until age 70 or later to take Social Security, you could see a significant increase in your monthly payment.
Even if you’ve already stopped working and started getting Social Security, a part- or full-time job can help offset extra expenses. JobSource is a tool from National Council On Aging (NCOA) that helps older adults assess their interests and skills, find training, and search for employment.
Mature workers aged 55+ with very limited or no income might also consider the Senior Community Service Employment Program (SCSEP). SCSEP provides training and part-time community service work that for most people leads to full-time jobs.
Depending on your income, you might be eligible for help from public and private programs that can help pay for your health care, prescriptions, food, utilities, and more. Use NCOA’s free screening tool BenefitsCheckUp® to see if you may qualify for any of these programs.
If you own your home, you may want to consider freeing up income by tapping into your home equity. There are several ways to do this, including taking out a home equity loan, a home equity line of credit (HELOC), or a reverse mortgage.
A reverse mortgage is a type of home loan that allows seniors to convert the equity in their home to cash to meet a wide range of financial needs. With a reverse mortgage, the lender pays you. The homeowner makes no payments, and all interest is added to the loan. A reverse mortgage must be repaid when you move or sell the property or the last borrower does, or by your heirs upon your death.
To get unbiased information about reverse mortgages, read Use Your Home to Stay at Home©, the official booklet approved by the U.S. Department of Housing and Urban Development.
If you need cash to pay for medical bills or caregiver expenses, asking your family for support might be a good way to preserve this asset. Adult children need to be careful that these extra costs do not disrupt their financial plans and their ability to save for their own retirement. It is often difficult but important for families to discuss finances and options realistically.
The government has made it less costly for families to pay medical bills or elder care if the taxpayer can claim an elderly relative as a dependent. This can make it easier to support older relatives who want to stay at home.
Interested in getting recommendations about many different options that can help increase your income? Get an EconomicCheckUp® to receive a personalized report and recommendations just for you. It’s free, confidential, and from a trusted source—NCOA. https://www.ncoa.org/.