In just a few days, the first Social Security payments of 2025 will be distributed. Beneficiaries who have retired will see an increase of $49 from the previous month, bringing the average monthly benefit up to $1,976. Some recipients might receive even more, while the highest earners could see checks as large as $5,108 each month.

However, many will discover that these funds don’t stretch as far as they might hope. Deductions such as Medicare Part B premiums and taxes on Social Security benefits will significantly reduce the amount many seniors actually receive, and despite a slowdown, inflation continues to erode purchasing power.

To maintain a comfortable standard of living during retirement, it’s wise to have additional income streams beyond Social Security. Here are four viable options to consider.

1. Personal Savings

Personal savings are a top choice for supplementing Social Security because you have direct access and control over these funds. If your savings are in a Roth account, you might also benefit from tax-free withdrawals, keeping your taxable income in retirement lower.

If you are still employed, aim to save between 10% to 15% of your income for retirement. If that’s not feasible, save what you can and try to increase your savings rate when possible, such as after a salary increase or a reduction in expenses.

For those already retired, contributing more to retirement accounts might not be an option. However, selecting the right investments to maximize returns without taking excessive risk is crucial. An often-recommended strategy is to subtract your age from 110 and invest that percentage of your portfolio in stocks, with the rest in bonds. Investing in low-fee index funds can help preserve more of your earnings from investments.

2. Part-Time Employment

Not everyone wants to work during retirement, but having a part-time job can significantly bolster your finances if your savings are insufficient. Your income needs are likely lower than when you were fully employed, giving you the flexibility to choose work that you enjoy or that fits your schedule.

If you own real estate, renting out property can provide a steady, more passive income stream. Ensure you are prepared for the responsibilities and costs associated with being a landlord before pursuing this option.

3. Reverse Mortgage

For homeowners 62 or older with considerable equity in their homes, a reverse mortgage could be a good solution. This allows you to borrow against the equity in your home without needing to make payments as long as you live in the residence. The amount you can borrow will depend on your equity and current interest rates, and you can choose to receive the funds as a lump sum, in installments, or as a line of credit.

While this can be a beneficial option for those with limited assets outside of their home equity, it’s important to consider the impact on potential inheritance. Any loan must be repaid upon passing away or moving out, which will reduce the value of the estate left to your heirs.

4. Additional Government Assistance

Seniors with limited income might qualify for other governmental aid programs that can help cover essential expenses. Programs like the Supplemental Nutrition Assistance Program (SNAP) can assist with grocery costs, while Medicaid can cover certain medical expenses not handled by Medicare.

Supplemental Security Income (SSI) is another benefit similar to Social Security but designed specifically for low-income seniors, as well as people who are blind or disabled. The maximum monthly benefit is $967 for an individual and $1,450 for a couple, but the actual amount depends on your financial situation and where you live, as many states offer additional supplements.

Each government program has specific eligibility requirements which may change, so review these thoroughly and contact the respective program directly for clarification if needed.

While not all of these income sources may appeal to you, utilizing even one can significantly enhance your financial security in retirement. If feasible, leveraging multiple options is even better, but make sure you fully understand each one’s implications.

Published by Alice M. Carter