If you, or someone you know, is nearing retirement age with no savings, no investments, and no home equity, then what are some retirement options? No: Do not buy lottery tickets or put $25 into the next hot cryptocurrency. Those are not Hail Marys, those are fantasies – let’s deal in reality by utilizing 9 ideas that may work for you.
So if there is no money at all, then there must be some big adjustment and sacrifice from your current living situation in order to survive on social security retirement benefits alone. Let’s go through them:
- One scenario is to find part-time work for semi-retirement. Many businesses take on elderly workers for low-stress, low-skilled, low-effort positions. The Sacrifice = lower pay and you’re still working. Be sure to match your employment to your physical ability, because even part-time work can make an enormous financial difference in making ends meet.
- Ask kids or relatives for help. For example, in exchange for living in one of their bedrooms, you agree to make contributions with either money or effort to the household that is agreeable to the other relatives involved. The Sacrifice = lack of privacy, there is no guarantee of permanence, it is difficult to ask for assistance, and you must abide by their household rules and situation.
- Examine the details of public welfare at all levels: city, county, state, and federal. You may qualify for subsidized housing, exemption from property taxes, food benefits, lower utility rates, and too many others to mention. The Sacrifice = it takes research upfront, ongoing effort to remain qualified, and you may need to sharply downsize your lifestyle or move to another jurisdiction that offers more benefits to create a financially stable situation.
- Move to a low cost-of-living locale. If you’re no longer working then you don’t need to live in an expensive area with lots of employers. Small townships, likely far from airports, are possible candidates for low cost-of-living. There are new lists of these places every year from retirement publications, along with low/no-tax states and cities for retirees. The Sacrifice = you’re living in the middle of nowhere, access to healthcare and transportation may be more challenging.
- Move abroad to a low cost-of-living country. There are affordable towns in Ecuador, Panama, Malaysia, Vietnam, Spain/Portugal, along with Peru and Costa Rica, which Americans have turned to for a cheaper retirement. A modest social security income can put you in the middle class or slightly upper-middle class, depending upon which city you choose. There are books and publications that specialize in information about where to live abroad as an ex-patriot in retirement. The Sacrifice = leaving family and friends, learning a new language, learning a new set of laws and bureaucracy for banking, healthcare, travel visa, and more.
- Reduce your largest expense, housing, by housesitting. Unlike years ago, there are housesitting platforms that match people needing house sitters with people willing to do it. As a bonus, you can get paid to do so. For some people, this is their full-time income along with getting paid per dog walk (there is another platform that matches up dog owners to dog walkers). The Sacrifice = you live out of a small suitcase, move a lot, and may not have a sitting gig 100% of the time, so you’ll need a cheap backup plan for those days.
- Sell nearly everything and move into an RV to dramatically cut your cost of living. You’ll be able to travel on a whim, and enjoy communities of other full-time RVers. There are numerous publications and online resources for the RV lifestyle, seasonal employment, and cutting costs to the bone. The Sacrifice = cabin fever from a small living space, noise from weekend partiers at RV parks, inconvenient to run errands or wash clothes, no permanent community.
- Create a living situation with roommates. Just like after high school or college, get a 2 or 3 bedroom apartment and rent out the other bedrooms to divide up the rent and utilities. The Sacrifice = privacy, inconvenience, and possibly conflict/drama.
- Some cities are desperate to increase their declining population and are willing to pay people to move there. This list and their qualifications changes over time, but here are a few valid today: New Haven, Connecticut will pay new homeowners up to $80,000 to move there; Detroit Challenge will pay $1,000 to $20,000 with various programs to move there; Kaitangate, New Zealand will give you a quarter acre of land with a home worth $165,000; and Candela, Italy will pay $2,350 to lure you to live there. There are other government benefit programs if you’re willing to build a new home, start a business, or start farming.
- Delaying social security will increase your monthly payment. However, there are hundreds of ways to play social security retirement benefits: file and suspend, rely on your spouse for optimal timing, and many other provisions. An expert will have software to map out the best filing strategy for your situation. Important Note: Do not claim retirement social security until you have gone through all the possible scenarios with an expert. Once you’ve chosen, it is irreversible and choosing poorly can cost you thousands a year in missed money for the decades to come. The Sacrifice = to delay filing, you’ll likely have to continue to work in some capacity.
Of course, if there is zero money as you face retirement, it is HIGHLY recommended that you take immediate and drastic actions to reduce your expenses and/or increase your pay, or get a side income. You’re in a crisis and this requires crisis behavior to turn things around so you’ll have a few bucks to explore or fund a change in your life going forward.
If you’re not at retirement age then now is the best time to learn the lesson: you cannot make up for lost time when accumulating money. This is why it is critical to:
- Start saving now and continue saving every time you receive any income
- Never gamble for a high return
- Never allow a large loss
- Never use money assigned for retirement on anything else
- Protect your bankroll