As a senior citizen or retiree, you may be looking for ways to make some extra money. Whether you’re on a fixed income or just looking to supplement your Social Security, there are a number of options available to you. In this blog post, we’ll provide some money making advice for senior citizens or retirees.
You Have Options
One option for making money as a senior citizen or retiree is to take advantage of your experience and wisdom by becoming a consultant. If you have expertise in a particular field, such as business, education, or healthcare, you can offer your services to individuals or organizations who may need guidance.
Another option is to start a small business. There are many businesses that can be run from home, such as an online, a pet-sitting service, or even a blog. If you’re crafty, you could also start a home-based business making and selling handmade goods.
Finally, you can use your skills and experiences to earn income by writing articles, books, or blog posts. If you have knowledge about a particular topic, there’s likely someone out there who would be willing to pay for your insights.
What is the largest source of income for people over 65?
For most people over the age of 65, Social Security is the single largest source of income. That’s according to the Social Security Administration, which reports that about 61 percent of seniors rely on monthly benefits to account for at least half of their income. For a little over one-quarter of beneficiaries, Social Security makes up 90 percent or more of their income.
How Social Security Works
Social Security is a retirement and disability insurance program that’s funded by payroll taxes from workers and employers. The program is designed to provide a financial safety net for seniors, as well as people with disabilities, widow(er)s, and children of deceased workers.
Workers begin paying into the system as soon as they start their first job, and those taxes are used to fund current beneficiaries. In return, workers are entitled to receive benefits when they reach retirement age (currently 66 or 67, depending on when you were born).
The amount of your benefits is based on your earnings history. So, if you’ve been working for many years and paying into the system, you can expect to receive a higher monthly benefit than someone who hasn’t been working for as long.
Why Social Security is so Important for Seniors
As people live longer and healthier lives, they’re increasingly likely to outlive their savings. That’s why it’s so important to have a source of income in retirement that isn’t reliant on investment returns or employer pensions (which are becoming less common these days).
For most seniors, Social Security is that source of income. In fact, without it, nearly half of senior citizens would live in poverty, according to the Elder Economic Security Standard Index (EESI). And for those who rely on benefits for 90 percent or more of their income, the poverty rate would jump to 79 percent.
Your Safety Net But Is It Enough?
Social Security is an important safety net for seniors. It’s especially important for those who don’t have employer-sponsored pension plans or whose investments haven’t performed well. If you’re over 65 and relying on Social Security benefits for at least half of your income, you’re not alone—61 percent of seniors do.
How do you live on a little in retirement?
Retirement is a time to relax and enjoy life after years of working hard. But for many people, it can also be a time of financial insecurity. If you’re living on a fixed income, you may be wondering how you can make your money last.
Here are some tips for living well on a little in retirement
Make a budget and stick to it.
One of the most important things you can do when living on a fixed income is to make a budget and stick to it. track your spending for a month or two so you have a good idea of where your money is going.
Then, make adjustments to ensure that your spending aligns with your goals and values. When making your budget, be sure to account for regular expenses such as groceries, utilities, and medications, as well as occasional expenses such as travel and entertainment
Maximize your Social Security benefits.
If you’re like most retirees, Social Security will be a key source of income in retirement. To get the most out of your benefits, familiarize yourself with the rules and regulations governing Social Security.
For example, did you know that you can begin receiving benefits as early as age 62? Or that there’s no penalty for working while collecting Social Security? By understanding how Social Security works, you can maximize your benefits and stretch your retirement income further
Consider downsizing your home.
For many people, their home is their biggest asset. If you own a home that’s larger than you need or more expensive to maintain than you’d like, downsizing may be a good option.
Not only will this save you money on things like utilities and repairs, but it may also free up some extra cash that you can use to supplement your income or boost your retirement savings.
Living on a fixed income in retirement doesn’t have to mean going without the things you enjoy. By following these tips, you can make your money last and still enjoy a comfortable retirement lifestyle.
How much money does the average retired person live on?
When you retire, you no longer have a regular paycheck coming in. For some people, this can be a scary prospect. Will you have enough money to live on? What will your lifestyle look like?
First things first: how much money do you need to retire? The answer, of course, is that it depends. It depends on your lifestyle, your location, and your health. That said, there are some general guidelines you can follow.
The rule of thumb is that you’ll need 70% of your pre-retirement income to maintain your standard of living. So, if you’re accustomed to spending $50,000 per year, you can expect to need around $35,000 in retirement. Of course, this doesn’t take into account any major life changes, such as relocating to a cheaper area or downgrading your home.
It’s also important to factor in inflation when thinking about retirement income. Inflation reduces the purchasing power of your money over time. According to the Bureau of Labor Statistics’ Consumer Price Index, the rate of inflation has been averaging around 3% per year for the past decade. This means that something that costs $100 today will cost $103 one year from now.
So, if we assume a 3% rate of inflation and 70% replacement rate, the $35,000 annual income goal for retirement rises to $39,525 by the time you retire—and that’s just to maintain your current standard of living. If you want to improve your lifestyle in retirement or leave something extra for your heirs, you’ll need even more money saved up.
Are You Saving Enough for Retirement?
Now that we know how much money we need to save for retirement, let’s take a look at whether or not the average person is on track. Unfortunately, the answer is no. A 2018 study by GOBankingRates found that 42% of Americans have less than $10,000 saved for retirement—and that includes both Baby Boomers and Gen Xers who are closer to retirement age as well as millennials who still have time to save up.
If you don’t have much saved up for retirement yet, don’t despair. It’s never too late to start saving—and there are plenty of ways to catch up if you’re behind. One option is to contribute catch-up contributions to an employer-sponsored retirement plan like a 401(k) if you’re 50 years old or older. For 2019, the catch-up contribution limit is $6,000 on top of the regular contribution limit of $19,000.
Another option is to open up an individual retirement account (IRA). With an IRA, you can contribute up until the tax filing deadline for the year (April 15th) and still get credit for that year—so if you contribute on April 14th 2020, it will count towards your 2019 taxes.
IRAs also offer tax benefits depending on which type of IRA you choose: traditional or Roth. With a traditional IRA ,you get a tax deduction for your contributions but pay taxes on withdrawals in retirement; with a Roth IRA ,you don’t get a deduction for contributions but withdrawals are tax free in retirement .
Conclusion: Money Making Advice for Senior Citizens and Retirees
There are many different ways for senior citizens and retirees to make money. By taking advantage of your skills and experience, you can become a consultant, start a small business, or earn income from writing.
Whatever option you choose, be sure to research the requirements and potential earnings before getting started. With a little effort and planning, you can find an option that best suits your needs and interests. Thanks for reading!