No Nest Egg? Here’s How to Pull Off Retirement Anyway

We’re told we’re supposed to save money — as much money as possible — for retirement, since Social Security alone won’t be enough to pay our bills. But what if you’re well into your 60s, your salary offers virtually no room for savings, and you know you can’t continue working full-time for years on end?

Though retiring without a nest egg is certainly not ideal, if that’s the situation you’re facing, you should know that it can be done. Here’s how.

1. Wait until 70 to file for Social Security

Maybe your full-time income doesn’t allow for much savings at present, and working a side gig to drum up extra cash just isn’t in the cards right now. If that’s the case, but you’re able to stay at your job until 70, doing so can boost your retirement income automatically by virtue of increasing your Social Security benefits.

For each year you hold off on filing for benefits past your full retirement age (which, depending on your year of birth, is either 66, 67, or 66 and a certain number of months), you’ll snag an instant 8% boost that will remain in effect for as long as those benefits are paid out. This means that if you’re looking at a full retirement age of 66 with a monthly benefit of $1,200, working until 70 will increase your annual income by $4,608. So while you’re not technically saving that money in a retirement plan, you’re getting the same result.

2. Get a part-time job once you leave your full-time one

Maybe working a side hustle isn’t feasible while you’re employed on a full-time basis. But once you leave that 40-hour-or-more-per-week job behind, you might find the idea of working a few hours a week relatively manageable, even if you’re older and your energy level isn’t what it used to be.

Imagine you’re able to earn $15 an hour and manage to put in just six hours of work per week. That’s another $4,680 to work with on a yearly basis.

Remember, the work you do as a senior doesn’t have to be work in the classic sense. You can take a hobby you enjoy, like gardening or baking, and turn it into a money-making opportunity. And while the extra cash will certainly help, just as importantly, working a little during retirement will give you something to do with your time, thus preventing you from spending money needlessly.

3. Slash your retirement budget as much as possible

There are certain expenses you’ll face in retirement that are pretty much unavoidable, like housing and transportation, to name a couple of big ones. But that doesn’t mean you can’t take steps to lower your major expenses, thereby stretching your income to the greatest extent possible. You can always see about downsizing your living space, getting rid of a vehicle you no longer need now that you’re not commuting to a full-time job, or moving to a less expensive part of the country to lower your bills on the whole.

Furthermore, you might consider relocating to a state that doesn’t tax Social Security if your benefits constitute your primary source of income. The majority of states, in fact, won’t tax your benefits, though you’ll need to consider the overall cost of living before moving in order to keep more of that money.

Retiring without a nest egg won’t be easy, and it certainly isn’t the recommended way to go. But if that’s the situation you’re faced with, and extending your career for many years isn’t an option, then there are ways to make it work. You may have to compromise by living an extremely frugal lifestyle, but that’s still a far better bet than running out of money in your old age.

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