In past generations, older adults looked to retire with three sources of income: savings, pensions, and Social Security. But with the decline of company pensions and financial markets taking a hit during economic downturns, many seniors face less income than anticipated in retirement. In fact, roughly 1 in 3 (or 17 million) older adults age 65+ is economically insecure, with incomes below 200% of the Federal Poverty Level (FPL).¹

The good news is there are steps you can take to cushion your budget, spend less money, and ease your financial worries.

Five money management tips to boost your income and savings

1. Consider delaying retirement

By delaying the age you start to receive Social Security benefits, you can increase your benefit amount. Waiting until age 70 or later to take Social Security will provide a significant increase in your monthly payment. This calculator from the Consumer Financial Protection Bureau can help you understand how your retirement age affects your monthly payment.

Get additional insights on planning financially for retirement.

2. Return to work

Even if you’ve already stopped working and started getting Social Security, a part- or full-time job can help offset extra expenses. It can also help you stay active and engaged with your community. Learn 7 effective job-search strategies for older adults.

If you’re a mature worker age 55+ with very limited or no income, one option to consider is the Senior Community Service Employment Program (SCSEP). SCSEP provides workplace training and part-time community service work that often leads to full-time employment opportunities. In addition to job placement, SCSEP helps older adults build their confidence and find financial stability.

3. Explore benefits assistance programs

Depending on your income, you might be eligible for public and private programs that can help you pay for health care, prescriptions, food, utilities and more. Visit BenefitsCheckUp.org—NCOA’s free, confidential online tool— and type in your ZIP code. You’ll get a list of money-saving benefits programs you may qualify for. You can even get help applying!

4. Consider leveraging your home equity

There are several ways that you can use your home equity to boost your income:

• A home equity loan, sometimes called a second mortgage, provides a lump sum of money with a fixed repayment schedule. This type of loan could be a good choice if you have a home improvement project or want to consolidate debt.
• A home equity line of credit (HELOC) provides money when you need extra cash and requires only the interest on the borrowed amount be paid. HELOCs make sense for a “rainy day” fund or cash to pay for major purchases. Learn more about home equity loans and HELOCs from the Federal Trade Commission.
• A reverse mortgage is a type of home loan that allows you to convert the equity in your home to cash to meet a wide range of financial needs. With a reverse mortgage, the lender pays you. You make no payments, and all interest is added to your loan. A reverse mortgage must be repaid when moving or selling the property or upon your death by your heirs.

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. Before agreeing to a reverse mortgage, you will be required to get counseling from a government-approved organization like NCOA.

5. Get financial help from family

If you’re facing high medical bills or having trouble affording daily living expenses, leaning on your family for support could help preserve your finances. However, monetary assistance from adult children or other family members should not disrupt their financial plans or ability to save for their own retirement. While talking about finances can be uncomfortable, it’s important for families to have open, honest, and realistic discussions about this topic.

Note: 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, and it may help to ease the burden that caregiving can place on the family.

Incorporating these simple yet powerful tips can help you take control of your financial situation, increase your income, and even build savings for a more secure future. For more insights on budgeting, financial planning, and earning extra money, visit NCOA’s Budgeting resource library.

Source

1. U.S. Census Bureau. POV-01. Age and Sex of All People, Family Members, and Unrelated Individuals, 2022. Found on the internet at https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-pov/pov-01.html