By Kailey Hagen – Jun 26, 2023 at 7:30AM

Diversifying your retirement income can make your future a lot more comfortable.

Social Security is a valuable source of retirement income, and despite many people’s fears, it won’t disappear anytime soon. Even the latest and gloomiest Social Security predictions indicate the program will still be able to pay some benefits to qualifying seniors in 2097 and possibly beyond. But it’s probably never going to cover all your retirement expenses.

If you want to maintain a comfortable lifestyle, you need additional sources of income to supplement your monthly Social Security checks. Here are four options to consider.

Two smiling people drinking coffee on patio.


1. Personal savings

Having a sizable nest egg to cover the bulk of your retirement expenses is ideal. Though the government has rules about when you can make penalty-free withdrawals from retirement accounts and when you pay taxes on those funds, it’s largely up to you to decide when and how you use that money. You can withdraw large sums to cover emergency expenses or to fund travel or expensive hobbies. And when life is quieter, you can withdraw less, allowing your remaining savings to continue growing.

It’s worth setting aside what you can for retirement, even if that’s only a few dollars each month. It builds a strong habit and, if that money is invested for decades before you use it, it could grow to be worth thousands of dollars. 

If you aren’t able to make regular retirement contributions right now, see if you can free up some cash by starting a side hustle or reducing expenses. If you get a raise, put the extra money into a retirement account. And set aside windfalls, like tax refunds or year-end bonuses, if you’re able to do so.

2. A job

Working in retirement isn’t how many people envision spending their senior years, but it can provide a steady paycheck and some much-needed financial security to those who don’t have a lot of personal savings. It can also give you a sense of purpose and an opportunity to connect with others.

It might be possible to switch to part-time employment at your existing job, depending on what you do. But if that’s not an option, you may have to switch employers or fields. This could be an opportunity, though. You may be able to find something that’s more in line with your interests so work doesn’t feel like a chore.

3. Rental income

Seniors who own extra property can rely on rental income during retirement. This could be a long-term rental for people living in the community or a short-term rental for those just passing through. You will still be responsible for the insurance and any maintenance the property requires, but even with these expenses, you can still earn a substantial sum each month.

However, not everyone is comfortable renting out their space to others. If this feels like too much work for you, it may not be the best way for you to supplement your Social Security checks in retirement. In that case, you could think about selling the extra property and adding that income to your personal savings.

4. Reverse mortgage

Reverse mortgages are a way adults 62 and older can tap the equity they already have in their homes to get some extra cash. To do this, you need to own a home and you need to have at least 50% equity. If you qualify, you can receive a lump sum or a line of credit you can tap as needed. And you won’t have to make any payments on the loan as long as you’re alive and living in the home.

But this isn’t a great fit for everyone. The entire balance of the reverse mortgage comes due if you leave the home, so it’s not the right choice for those who don’t expect to live at the property long-term. It might also be a poor fit for those who want to pass the property to their descendants. They’ll have to pay off the balance of the reverse mortgage upon your death, and if they can’t, they won’t be able to keep the home.

No one knows your financial situation and your hopes for retirement better than you, so only you can decide on the best strategies for supplementing your Social Security checks. You could use one or a combination of the strategies above, but see if you can brainstorm additional ways to bring in extra cash as well.