Are You Doomed To Work Forever? What You Can Do If Your Social Security Isn’t Enough

Laveta Brigham

Making wise financial plans for retirement is essential if you want to enjoy your golden years without having to worry about making ends meet. This is especially true if you will be relying heavily on Social Security and don’t have much in retirement savings to fall back on. Fortunately, there […]

Making wise financial plans for retirement is essential if you want to enjoy your golden years without having to worry about making ends meet. This is especially true if you will be relying heavily on Social Security and don’t have much in retirement savings to fall back on. Fortunately, there are ways to live cheaply and stretch your dollars now so that you can eventually leave the workforce.

Whether you’re close to retirement age or have a while to go, these are things you can do now to be financially successful in the future.

Last updated: Sept. 25, 2020

Spend Less Than You Earn

Although there is no one-size-fits-all strategy for financial success, there is one universal rule everyone should live by, said J.D. Roth, founder of Get Rich Slowly, a financial website.

“It’s hard to say that there’s one thing that everyone should do,” he said. “I believe that each of us has different strengths, goals and circumstances, so blanket advice is generally useless. Having said that, there is one universal (tip): To accomplish whatever you want to accomplish, you have to spend less than you earn. Yes, that sounds elementary, but it’s a fundamental truth. Whether you want to buy a home, travel the world, send your kids to college or retire early, you’ll make quicker progress toward your goal if you increase the gap between your earning and spending.”

Be Disciplined

“Financial discipline is one of the biggest keys to financial success,” said Sharon Epperson, CNBC senior personal finance correspondent and a 2018 Best Money Expert nominee. “Keep track of your spending: record purchases in a journal and stay accountable. With online spending, debit cards and credit cards, it can be easy to consistently splurge — but if you set financial goals, you can stay away from unnecessary purchases on a whim that will keep you from having that savings account, paying off that loan so you can stop collecting interest, or saving for the retirement you deserve.”

Save a Fixed Percentage of Your Income

“Save 20% of your income off the top,” said Ted Jenkin, CFP, founder of oXYGen Financial, a firm dedicated to the X and Y generations. “You’ll also feel less guilty about what you spend off the bottom by saving first.”

Take Advantage of Your Employer Match

Make sure that you’re contributing enough to your 401(k) to max out your employer match. Otherwise, you’re missing out on extra money you could be getting toward retirement while you’re still working.

Save Every Raise and Bonus

Don’t fall victim to lifestyle creep. When you get a raise or bonus, immediately funnel the extra money into retirement savings.

Have a Guaranteed Lifetime Income

“Cover your basic expenses in retirement with some form of guaranteed lifetime income,” said Tom Hegna, author, speaker and economist. “No retirement plan is complete until then.”


The earlier you start investing, the longer you have to take advantage of compounding interest. Even if you get into the investing game later in life, this is a good way to grow the money you do have.

Start Cutting Costs: How To Save Money on All Your Monthly Expenses and Bills

Pay Off Your Debt

Interest payments can eat up your precious retirement funds. Before retiring, pay off your credit card debt, student loans and mortgage so that you will only be using your Social Security benefits to pay for day-to-day expenses.

What To Do If You’re 50 or Older

Ideally, saving for retirement is something you begin to do in your 20s. However, if you’re 50 or older and haven’t been disciplined about retirement planning, there are still steps you can take to make sure you’re financially prepared when you are ready to retire.

Take Action

It’s important to do something that will help you be ready for retirement, and to do it sooner rather than later, said Jenkin.

“Take action, any action,” he said. “Pay off your mortgage quicker. Try to max out your 401(k) with the catch-up (contribution). Open a Roth IRA or a traditional IRA and use the catch-up (contribution). Max out your HSA. Just take action.”

Reduce Housing Expenses

“If you find that you’re playing catch-up, you may have to make some big moves,” Roth said. “For most Americans, the biggest possible budget booster comes from reducing housing expenses. Housing accounts for one-third of the average American budget. This is huge. It’s more than clothes, food and health insurance combined. You can clip coupons all you want, but that’s never going to make a material difference to your retirement despite all of the effort. But if you’ll suck it up and find a way to cut your housing costs, you can save hundreds — sometimes thousands — of dollars per month.”

“This can be a tough sell, though, because people love their homes,” Roth said. “They view downsizing or moving to a lesser neighborhood as backward motion. That’s too bad. To my mind, it’s actually progress because it helps you reach your financial aims much more quickly.”

Consider Relocating To a Place With a Lower Cost of Living

If you’re OK with selling your current home, you might consider relocating to an area with a lower cost of living. You’ll be able to maintain your lifestyle for much less if you do.

Move To a State That Doesn’t Tax Social Security Benefits

In addition to relocating to a place with a low cost of living, you might consider moving to a state that doesn’t tax your Social Security benefits (if you don’t live in one already). In the South, Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, Tennessee, Texas, South Carolina and Virginia don’t tax Social Security income. In the South Atlantic, Delaware and Maryland are tax-free for Social Security benefits. In the Northeast, Maine, Massachusetts, New Hampshire, New Jersey, New York and Pennsylvania are tax-free for Social Security benefits. Midwest states that don’t tax Social Security income include Illinois, Indiana, Iowa, Michigan, Ohio, South Dakota and Wisconsin. In the West, your best bets are Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Washington and Wyoming.

Make the Most of Your Social Security Benefit

“Optimize your Social Security benefit for you and your spouse,” Hegna said. One of the best ways to optimize Social Security is to delay claiming your benefits. If you wait until age 70 to start collecting, you will be able to collect the maximum benefit.

“This is the best money that money can’t buy,” he said.

Take Advantage of ‘Catch Up’ Contributions

“If you are 50 or over, make sure you take advantage of the extra catch-up contributions that you can make to retirement savings accounts,” Epperson said.

The 401(k) annual contribution limit is $19,500 for 2020, and those ages 50 and older can make an additional catch-up contribution of $6,500. For IRAs, the contribution limit is $7,000 for those who are ages 50 or older.

“Contributions to a traditional 401(k) or IRA will lower your taxable income dollar-for-dollar, which is another great perk,” she said. “If you contribute to a Roth 401(k) or Roth IRA, you are building up savings that you generally won’t have to pay taxes on at all in retirement. That’s also great.”

Check For Any Benefits You May Qualify For

If you think you will have trouble making ends meet when you retire, you might qualify for government assistance through Supplemental Security Income, the Supplemental Nutrition Assistance Program (SNAP) or subsidized housing. You can check your eligibility at

More Tips: 20 Ways To Save Money Fast

Consider Taking Out a Reverse Mortgage

If you are 62 or older, you can opt to take out a reverse mortgage which allows you to convert part of the equity in your home for cash that you can use to help pay for living expenses. The loan has to be repaid when the borrower dies, sells the home or no longer lives in the home as a principal residence.

With a reverse mortgage, you don’t have to sell your home or pay additional monthly bills — but it does come with some risk. A reverse mortgage can use up the equity in your home, which means fewer assets for you and your heirs. There are also fees and other costs, including origination fees, closing costs and servicing fees over the lifetime of the loan. Plus, you will owe more over time as interest is added to your balance each month, and those interest rates might change over time.

Sell Your Second Car

Cars can be a money pit, even if you’ve already finished paying your car off. In addition to paying for gas, you have to pay for maintenance and insurance, which is usually hundreds of dollars every month. If you currently have more than one vehicle, consider selling your second car to save on costs. Plus, the money you get from selling it can be put into your retirement savings.

Sell Off Other Items You Don’t Need

You probably have extra retirement savings all around your home. Sell off things you no longer need or won’t need in retirement, such as work clothes, unused electronics and collectibles.

Cut Out Unnecessary Expenses

Day-to-day expenses can be eating up more of your retirement savings than you realize. If you’re close to retirement age, start cutting out your “nice-to-haves” like your daily latte or monthly massage.

Beware of Unexpected Expenses

When planning for retirement, you are probably taking into consideration basic living costs such as housing and other necessities — but what about unexpected expenses?

Here are the most common unexpected expenses that can put a retirement plan at risk — plus, how to prepare for these sudden obstacles.

Ask Tough Questions

Jenkin said that some of the most common unexpected expenses are healthcare, mortgage expenses, kids and parent care.

“Most people don’t ask the tough questions they need to because they worry about overstepping ‘financial’ boundaries,” he said. “Don’t be afraid to ask your parents if they have long-term care, or if they have saved money for your kids’ college education and how much in order to allow you to plan better with your own finances. If you refinance your home 10 years before you retire, think about whether or not you can carry this mortgage payment into retirement. By asking both yourself and those that surround you tougher questions today, you can plan better for the sudden obstacles of tomorrow.”

Exercise ‘Financial Resilience’

“All financial plans are subject to fate and fortune,” Roth said. “You lose your job. Your spouse gets sick. Your house burns down. While it’s not possible to plan for specific unexpected events, it’s certainly possible to prepare for problems in general.

“From my experience, the best way to do this is to exercise what I call financial resilience,” he said. “Financial resilience is the ability to cope with the unexpected without panic — kind of like how a tree bends in a windstorm without breaking. A variety of factors contribute to financial resilience. The greater the gap between your earning and spending, for instance, the less damaging sudden job loss is to your situation. The more you have in emergency savings, the less panic you feel when your car is totaled in the Walmart parking lot. The more diversified your investments, the less you care about stock market swings.”

Financially Plan For Long-Term Care Costs

“Long-term care risk is the $1 million problem that can completely derail your retirement plan,” Hegna said. “Having any plan for long-term care costs is better than no plan.”

Don’t Forget To Budget For Healthcare

“The biggest expense category that is often ignored in retirement planning is healthcare,” Epperson said. “A recent Fidelity report found that a 65-year-old couple retiring in 2018 will spend about $280,000 on average on out-of-pocket health care expenses and premiums throughout their retirement. This assumes they are both on Medicare. This is just an average amount, and could be higher or lower depending on how healthy you are and how long you live.

“You can plan ahead for these expenses by making sure that you will be adequately insured for healthcare, long-term care and disability expenses if needed in retirement,” she said. “You can also start to stash money away now specifically for healthcare expenses by putting away money tax-free into a Health Savings Account as long as you also have a high-deductible health insurance policy.”

The Biggest Retirement Planning Mistakes — and How To Avoid Them

You might be sabotaging your retirement plans without even realizing it. These are the biggest money mistakes people make when planning for retirement and how to amend these issues.

Mistake No. 1: Underestimating Your Retirement Expenses

“Although most people believe they will need a lot less money in retirement, people often forget about how they will have to help their kids, how much insurance is going to cost and when they refinanced their mortgage,” Jenkin said. “People should really dig into their current expenses to formulate a more accurate plan of what it will cost them tomorrow.”

Mistake No. 2: Waiting Too Long To Start Saving For Retirement

“When you’re young, retirement seems like it’s a long way off,” Roth said. “It is. But if you’ll start saving regularly when you’re in your 20s (or now, if you’re older), you can set yourself up not only with a secure retirement but the freedom to make other important decisions without worrying whether you can afford to make the moves. If by starting early you’re able to amass a large wealth snowball, that gives you the freedom to quit a lousy job, move to a new city, take a year off to travel, whatever. But if you wait to start saving, you place yourself at the mercy of the whims of fate.”

Mistake No. 3: Not Having a Retirement Plan

“People fail to plan,” Hegna said. “They spend more time planning their yearly vacation, which may last a few weeks. Retirement could last 30, 40 years and they wait until the last minute to talk about it.”

Mistake No. 4: Not Paying Yourself First

“The biggest mistake that people make when planning for retirement is not budgeting for it before they start paying their monthly bills,” Epperson said. “The most important bill you should pay is to yourself for your financial future. If you make sure you can stash away 10% of your pay for retirement/long-term savings before deciding what you can afford for rent or mortgage or other expenses, you’ll be more likely to live within your means.”

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