For most Americans, retirement can be an adjustment, particularly when it comes to finances. The primary source of income for many Americans is a 401k or other retirement savings account drawn down after a lifetime of saving. However, not everyone has been fortunate enough to save over the years.
In a recent GOBankingRates survey of over 500 retirees, more than 38 percent responded that they don’t feel they have enough money to live comfortably in retirement, including almost half of all female respondents. With so many people lacking the necessary retirement funds, plenty turn to supplemental sources of income to make ends meet. If you’re planning to retire soon, it’s important to see how retirees are staying afloat and factor in the toughest financial hurdles facing them today.
A Majority Collect Social Security
Since President Franklin Roosevelt signed the Social Security Act into law in 1935, the program has become a key component in the retirement plans of Americans, particularly those who aren’t able to save during their career.
Of the respondents who answered the question, 58 percent (nearly 300 respondents) said they collect Social Security. And when asked if they relied “heavily” on Social Security, nearly 45 percent said yes — including 52 percent of women in the poll versus 39 percent of men.
Less Than Half of Retirees Have a Pension
Pensions are increasingly going out of style in this day and age — mostly because companies no longer offer them. But, they were an extremely common way for employers to provide for their employees in retirement for most of the 20th century.
Still, a large portion of today’s retirees relies on pensions for income. In the poll, 42 percent of respondents claim they have a pension and rely on it in retirement.
Individual Stocks or Mutual Funds Are Not a Popular Option
Stocks are usually an essential part of any 401k or IRA. But, they tend to be phased out in favor of bonds — which aren’t susceptible to the volatility of the stock market — the closer one gets to retirement.
That doesn’t mean retirees won’t invest outside their 401k as a way to supplement their income. Dividend stocks, in particular, can provide an additional — and important — income stream for retirement. However, only 18 percent of respondents said they rely on stocks or mutual funds to fund their retirement.
Not Many Have a Side or Part-Time Job
Plenty of people might discover that they still need to work, at least part time, to supplement their retirement income. Others might just find work they enjoy and want to occupy their days with something more fulfilling.
Either way, 15 percent of respondents said they rely on their side or part-time job in retirement.
More Than One-Tenth Collect Rental Income
Finding investment opportunities outside the norm can also help support retirees, especially those in real estate. If you own a vacation home or just invest in a rental property, collecting rental income can be a great way to make your assets work for you. Nearly 11 percent of the poll’s respondents said they rely on rental income in retirement.
Very Few Use Their Home Equity
For many Americans, their primary investment is the one they make in their home.
While drawing on home equity can be risky — it might result in losing your house — it can also provide supplemental income for retirees. However, about 8 percent of retirees said they rely on home equity.
Click through to find out exactly how much you need to retire.
More on Retirement Planning
- The Best Places to Retire in America Are All College Towns
- Best and Worst States to Retire Rich
- 30 Ways to Retire Earlier
- Watch: Best Cities to Retire on a Budget of $1,000 a Month
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