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Many people are already retired by the time they reach their 70s. Read on to see what 70-somethings have saved.
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Since Americans are living longer these days, more people may be opting to work into their 70s. But for the most part, it’s fair to assume the typical person in their 70s is retired, at least partially. And at that point, you may be tapping your IRA or 401(k) plan consistently rather than leaving that money alone to let it grow.
Data from Northwestern Mutual’s latest Planning & Progress Study, however, reveals that the average 70-something does not have a very large nest egg to work with. The average savings balance for people in their 70s is just $113,900.
If you withdraw from that sum at a rate of 4% a year, which is what financial experts have long recommended, that amounts to just $4,556 of annual income. And that 4% withdrawal rate may actually be too generous given today’s economic environment.
Now to be fair, it may be that part of the reason 70-somethings have an average of $113,900 in savings is that they’ve already started to dip into their nest eggs. If you’re in your late 70s, for example, it may be that you’re 10 years into retirement, so that would make sense.
But all told, $113,900 is not a lot of money for retirement purposes. So if you’re finding that money is tight, you may need to get creative in generating more.
How to boost your income once you’re in retirement
Some people who find that money is uncomfortably tight in retirement opt to un-retire. They go back to work on a full-time basis and try to boost their savings.
But that may not be something you want to do, and understandably so. In that case, you can explore alternative ways to generate income without making yourself miserable.
One option is to join the gig economy. Monetize a hobby, or find flexible work that’s enjoyable, whether it’s selling crafts or becoming a tutor.
Another thing you may be able to do is monetize your home if you own one. Let’s say you have an area in your home you don’t use much, like a finished basement. You could rent it out and use the money you collect from a tenant to help cover your bills.
And if you don’t want a full-time tenant, consider renting out parts of your home. If you live in a place where parking is hard to come by and you have an extra spot in your driveway, rent it out to a desperate commuter. You can even try renting out storage space in your home for cash if you have plenty of it.
You’re not doomed
You might assume that if you only have somewhere in the vicinity of $113,900 in savings during your 70s, that your retirement is apt to be a disaster. But that’s not automatically the case. If you’re creative about generating income, you may find that you’re able to get by on a smaller nest egg.
And also, don’t underestimate the power of cutting some expenses. Getting rid of a car and taking the bus when you need to go places could save you a bundle of money on maintenance and auto insurance. Think about the bills you can shed without making yourself unhappy, because a few key changes could go a long way.
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