4 Ways You Can Supplement Your Social Security Income in Retirement

Living comfortably on just Social Security is a difficult thing. That’s not to say that it absolutely can’t be done. But you may not have much wiggle room in your retirement budget if you limit yourself to a monthly Social Security check and nothing more.

The typical Social Security recipient today collects a little less than $2,000 per month. Knowing that, it’s important to set yourself up with other income streams for retirement. Here are some ways to supplement your benefits so you’re not left struggling to keep up with your costs.

1. Work a part-time job

A lot of people look forward to retirement specifically so they can stop reporting to a job. So the last thing you might want to do in retirement is work part-time. But it’s also a great way to boost your monthly income and stay busy at the same time.

When you have many free hours in a day, you’re more likely to either spend money or want to spend money. If you’re busy working, it occupies some of your time, which makes it easier to spend less in general.

2. Invest in dividend stocks

Many retirees assume they shouldn’t own stocks because of the risks involved. But owning a small amount of stocks could work to your benefit, especially if you choose stocks that pay dividends.

Companies aren’t obligated to pay dividends, but if you choose stocks with a long history of paying them, you’re more likely to enjoy consistent income in that form. Plus, your dividend stocks could gain value over time, giving you the option to sell them at a profit to pad your savings.

3. Load up on municipal bonds

Bonds are a fairly stable asset, which makes them an appropriate retirement investment for a lot of people. And the nice thing about bonds is that they’re required to pay investors interest on a regular basis (whereas stocks aren’t required to pay dividends – many just do).

Within the realm of bonds, you have choices. One reason municipal bonds tend to be a favorite among retirees is that the interest they pay is always exempt from federal taxes. And buying municipal bonds issued by the state you live in helps you avoid state taxes on that interest income, too.

4. Rent out part of your home

Some retirees opt to downsize to save money on home maintenance and property taxes. But it’s not a given that downsizing will make sense for you, especially given how elevated home prices are today.

Also, real estate inventory is down on a national scale. So even if you’re willing to downsize, you may not find a smaller home in the town you want to live in.

If you’re hanging onto a larger home in retirement, renting out part of it could serve as a nice income stream for you. And you may even be able to get some help around the house from your tenant as an added bonus.

As you get older, a lot of the maintenance work you used to do might get difficult. But outsourcing it could strain your budget.

You may be able to find a tenant who’s willing to do a lot of that work in exchange for reduced rent. That way, you both come out a winner.

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