Closing In on Retirement With Very Little Savings

by Reader Contributors

Closing in on Retirement with Little Savings photo

If you’re worried that Social Security alone won’t be enough to support you in retirement, you’re likely not wrong and you’re not alone. Our readers share what they are doing to make up for a lack of retirement savings.

Dear After 50 Finances,
Are there any other readers closing in on retirement with little or no retirement savings? We are in this situation, and I do not think we can make it on Social Security alone. What are your plans to support yourself during retirement? Will you continue to work in some way? This is a very stressful time in our lives, and I admit I’m scared. I would really like to hear from others in the same situation. Thanks!

Betty Jo

Slash Your Budget Ruthlessly

I found myself in this situation when I had to retire early for medical reasons. I lived solely on my Social Security for over 20 years.

First, identify the little things you can do without, such as gourmet coffee at fancy shops, frequent eating out, and pre-cooked food. These add up fast.

If you are paying someone else to cut your lawn, clean your house, wash your car or do other chores, determine which ones you can do yourself.

Buy your clothing from the clearance racks. This is often cheaper than consignment shops.

Are you eligible for benefits?

Check whether you are eligible for any state or federal benefits, such as SNAP, low-income Social Security benefits, which pay for Medicare premiums, and more. These will put money back into the budget for other things. will help you find these and other programs.

Slash your budget ruthlessly. You can always add back on later.

Can you work part-time?

Consider whether you can work part-time to bolster your budget. You can even start your own small business offering services such as baby-sitting, dog-sitting or dog walking, cat-sitting, or sewing.

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Make Prepping for Retirement Your Hobby

Make it something you do often and with pleasure. It is so much less stressful if you use this mindset. Otherwise, it gets too overwhelming.

Get out of debt

Concentrate on paying off all debt using your regular income by making strong cuts to spending. Sell anything you don’t actually use. Learn to love and appreciate what you already have.

Start learning to live on less

This is also the very best time to practice learning to live on less than what you will bring in once you can no longer work. Even in retirement, you must continue to save for emergencies like car repairs, house repairs, etc. It can be done. Read Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence and rethink your priorities.

Take an extra job

I found taking an extra job a worthwhile endeavor. I worked a second job off and on for over ten years as a seasonal weekend employee at the IRS during tax season. It wasn’t a lot of money, but it completely changed my financial future. Don’t spend the extra income! Immediately send the entire paycheck into an individual Roth IRA and pretend it is not there. It doesn’t belong to you. Instead, it belongs to the future you.

Stop bailing out others

Retrain anyone who depends on you to bail them out of financial problems. They need to take on an extra job themselves and learn to handle their money. Learn to say “NO” to yourself and others without guilt. (See Bailing Out Your Adult Kids Financially.)

Open a Roth IRA

Leave your Roth alone. Don’t look at your account balances every day. It will only create anxiety.

One of my co-workers, who attends expensive investing workshops a couple of times a year and moves her money around every few weeks, was very happy to tell me she had only “lost $54” this past year because of her daily strategies. I didn’t move my money, and it grew to $6K. No one can time the market.

Vanguard, Putnam, Schwab, and Fidelity are all reputable companies where you can open an online individual Roth IRA if you do not already have one. Try to max your contributions to your Roth every year because that money will not be taxed again, no matter how much it grows. If you have more money, you can put it aside, become familiar with the catch-up rules, and make deposits into a traditional individual IRA or through your employer.

I suggest using a target date mutual fund that is named by the year you want to retire. These are very well managed for a very low fee. Personally, because I was/am willing to take the risk (and there is always a risk), I picked a target date fund 20 years farther out from my actual retirement date because more money will be invested in stocks. You will be fine as long as you make a plan and take action on it. Make it your priority. Every step you take will help safeguard your future.

Will Debt Derail Your Retirement?

One of the most important ingredients for a comfortable retirement is to be debt free when you retire. This simple checklist can help you find out if debt could derail your retirement.

Find a Flexible Part-Time Position

We are in the same situation, except my husband is disabled (he had a stroke six years ago), and I had to take early retirement to make ends meet. I drive a school bus and/or a school van for two hours in the morning and two hours in the afternoon. This way, I can be home more and still get extra money. Being a school bus driver or van driver is a great part-time job for retired folks (and anyone looking for a few hours of work). It pays very well, and you still get to be home more.
Donna from PA

Do a Practice Run

Before you retire, I suggest you try to live on what you will be getting for Social Security for at least six months to a year. I am retired now and wish I had done that. Since I retired, however, I am no longer on medication at all. Apparently, my job and the commute to my job were causing my blood pressure to skyrocket, so that’s one bonus. I no longer have to pay for pills.

What’s Your “Plan B”?

If you have minimal savings or none at all, you are not ready to retire. Social Security is generally not enough for a comfortable retirement. You will need to continue working until you have a nest egg.

Also, you need a plan going into retirement. Start by setting up a budget using the amount of money you will have coming in with Social Security. (You can get this information on your Social Security benefits on the website.) Don’t forget the emergency expenses like car repairs, home maintenance/replacement (if you are a homeowner), and medical expenses. See if you can live on that budget prior to actual retirement. If you can’t, you need a “Plan B,” which will include continuing work, whether part-time or full-time.

If you own your own home, consider downsizing and put that extra money in your retirement account.

Explore possibilities of having extra income following retirement with something you love to do. The possibilities can be endless. Babysitting, dog walking, housesitting, working at election polls, and part-time caregiving are all possibilities. If you have a nice car and are in an urban area, Uber driving can boost your income. The main thing is to have some savings for when you can no longer work and to have a plan and budget in place. Many websites have retirement planning information. AARP is one, and you do not have to be a member to use the website. Good luck, and enjoy retirement when the time comes!

It’s Possible To Retire With Little Savings

There are ways to retire with little savings. They all boil down to drastically reducing your expenditures and depend on what kind of assets you’ve built up besides retirement savings. Things that can be done are:

Your house could very well be an asset

If you own one, moving can help fund retirement in multiple ways. First, you can get money that’s being stored up in your house out. Second, you can decrease your cost of living when moving. Within a metro area, you can move to a cheaper neighborhood with smaller houses and a school system that’s not as good.

Make sure a new house is compact and one level and will be easy to maintain and navigate as you age. (See Will You Be Able to Age In Place?) If you don’t feel particularly tied to your area, you might also consider moving across the country or south of the border to a less expensive locale. has an interesting city-to-city cost of living calculator.)

Get rid of one car

A car is another big expense that could be cut. Once you’re not working, does your household really need two cars? Maybe not. (See Could You Give Up Your Car?)

Get a roommate

Your friends and family can also be an asset. While moving, you might consider combining households with either fellow retirees on a budget or moving in with an adult child. My grandmother spent the last five or six years of her life rotating between her living children’s homes. If you’re only just approaching retirement, you probably have more than five or six years left, but something along these lines might work for you. (See 13 Secrets to Successfully Taking in a Roommate.)

Find a part-time job

Your talents and interests can be assets as well. Just because you’re retiring doesn’t mean that you can’t work at all. Instead, try taking on small side projects. Watch the neighbor’s kids after school. Tutor. Garden. Become an Uber driver. You can get paid to do things you enjoy doing anyway.

Work Doesn’t Have To Be Stressful

My husband and I picked up part-time jobs as Customer Service Representatives at a local non-profit museum. We only work three days a week for seven hours each day. It only pays minimum wage, but it is not stressful. We have a great work environment and the money helps augment our retirement income. We love it.

Don’t Take Early Social Security

Since you don’t mention your age, it’s a little more difficult to give pointers. You mentioned Social Security, so I assume you are at least approaching 62, but don’t take early Social Security. You gain about 8% per year by waiting until your full retirement age, and it goes even higher if you wait until 70. (See Factors to Determine the Best Retirement Age for You.)

Meanwhile, pay off any debt that you have. People who retire in debt begin to have problems pretty quickly as their retirement income is not as high as their working income.

If you are already debt-free, develop a “retirement budget” using your known income in retirement. If you have excess money, put that in to build up some excess savings. Even retirees need emergency funds. Your retirement budget might show you have a shortage and will guide you in knowing how much part-time work you must do to make ends meet.

To help save money on health care, find a supplement plan for your Medicare. (See What You Should Know About Medicare Before Age 65.)

As I mentioned earlier, a budget is a must. Get started with that today. And, of course, use After 50 Finances and The Dollar Stretcher to provide you with tips on saving money.

You’ve Got Work To Do

You have a lot of work to do. You must come up with a budget that will make it possible to live on Social Security alone. Yes, you will have to work as well. The work money will be a bonus for vacations and other expenditures. The bare bones of life must come from your monthly Social Security check. So, you must, in some way, downsize. Sell your home. Rent a room out. Move to a smaller apartment. Get an RV and move to an RV park.

Put your name on the list at all elder housing that is government subsidized. There is a waiting list.

Reduce your housing expense

Consider moving in with a relative. Does a child or niece/nephew have a spot for a tiny house or RV? Do they have a garage or workshop that could be converted to a small apartment? Housing will be your biggest expense, and you must change now.

Determine if you qualify for any benefits

Check to see about food stamp eligibility when you go onto Social Security. Check to see if you are eligible for any senior discounts or subsidies on utilities.

Take a good look at utility bills

Look at your current home heating and cooling. Can you do without air conditioning? Maybe one room can be air-conditioned. My mom was on a tight budget and she would turn the air conditioning in the living room on during the day and then shut it off at night. She’d then turn the bedroom air conditioning on with a timer that turned it off at 1 AM. She cut her bill by $90 that way. Can you switch to a wood stove for heat? Retirees have time to gather wood on nice walks in the fall. Consider candles for light at night in all but the main room. Sell the big refrigerator and get a small one. (See 32 Ways to Save Money on Your Utility Bills.)

But keep the freezer if you have a separate one. You will have time to shop more frequently and can store good sales. (See A Grocery Stockpiling Guide: How and When to Save.)

Have a sale and get rid of all the baggage you have accumulated.

Sell your car, if possible

Consider going down to one car (get rid of gas guzzlers) or no car if there is public transportation. You do not have to be anywhere at any specific time when you retire, so public transportation works well. Many people will give the elderly rides to the store or church, so ask.

Shop at thrift stores

Start shopping at thrift stores for clothing, etc. Gifts can be bought at thrifts ahead of time. (See 10 Secrets of Thrift Store Shopping.)

Find ways to make extra cash

A huge possibility for making money is thrifting and repurposing toys and furniture. Sell them at garage sales periodically and make a profit. There are antique and thrift malls that rent booths. It is fun and good exercise to find treasures and sell them. (See Flipping Thrift Store Items for Extra Cash.)

Consider babysitting in someone’s home. Free utilities and free food help with the budget, and you can charge a reasonable rate to help a young family out.

Can you sew? Are you good at fixing things? Can you tutor? Do it for extra money.

Go visiting

Do you have friends and family that would like to see you? Go on extended visits if you feel welcome. This saves on utilities and keeps you from being too bored.

Get involved in church or volunteer activities that cost little but keep you busy. My mom was a hospital volunteer. She got free lunch on days she volunteered and usually was able to bring home a to-go box for that night’s dinner. (See 7 Ways Volunteering Can Save You Money.)

Cook from scratch

Start cooking from scratch and make up your own mixes, condiments, and dressings. Use powdered milk whenever possible. Learn how to bake your own bread and make homemade noodles.

Start a garden

Do you have a yard? Plant a vegetable garden and raise chickens for eggs. Plant fruit trees. Gather fruit from neighbors’ and friends’ trees that may just be falling on the ground. Take up canning.

Meals on Wheels

See about getting Meals on Wheels for a once-a-day big meal and then do soup and sandwiches for the other.

Don’t pay for Wi-Fi

Consider going down to just one cell phone. Try doing it without Wi-Fi or cable. You can find free wi-fi and you can go to the local library for books and movies. Maybe a neighbor or friend will let you come over for your favorite show.

Cut insurance costs

Take a look at your insurance expenses and cut what you can do without. File for home exemption. File for any elderly tax exemptions. (See Stretching Auto Insurance Dollars as You Approach Retirement.)

The one thing I know is can do this and have fun, too.
Van in AL

Don’t Miss This Recommended Reading

I recommend reading the book How to Retire the Cheapskate Way: The Ultimate Cheapskate’s Guide to a Better, Earlier, Happier Retirement.
Valerie in Oklahoma

Reviewed July 2023

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