5 Tips for Retiring on $200K or Less

Mature businessman in office environment working at his desk.
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It’s no secret that America isn’t saving nearly enough for retirement, but a new study from GOBankingRates shows just how far behind the oldest Americans have fallen. Roughly 72% of the study’s respondents ages 65 and up have $200,000 or less to work with — much less, in most cases.


Approaching retirement with scant savings is a dreadful feeling; but, with a few smart moves, you can make the best of a bad situation. GOBankingRates asked the experts how to get a lot out of a little.

$200,000 Is Good — Growing It Is Even Better

About 10% of the 65-and-up crowd reported having $100,001 to $200,000. A six-figure nest egg is something to be proud of, but stretching it for decades will require meticulous strategizing.

“People who are retiring with savings of almost $200,000 should audit their annual expenses and the expected annual inflation growth rate,” said Click Intelligence CEO Simon Brisk, who consults with seniors on their retirement plans.

If you can settle into a pared-back lifestyle, you should be able to put most of that money to work earning passive income — at least in the beginning. Bonds, dividend stocks, REITs, annuities and crowdfunding are a few of the most accessible and affordable ways to purchase a new income stream — but you might not have to spend anything at all.

Although you probably can’t afford to buy a rental property, you might be able to generate passive income from an asset you already own. You can rent an unused car on Turo, for example, or lease storage space in an empty basement, attic or garage on Neighbor.com.

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Your Best Investment Might Be Relocation

Another 10% of survey respondents reported having between $50,001 and $100,000. That’s a good chunk of change, but hopefully one you’ll outlive. Where you do the living might be the key to your success.

That kind of money is enough to relocate to a place with low living costs, which could save you more in the long run than you spend on the move.

“Take note that some of these cities may have a higher crime rate or poverty level, so do your research thoroughly,” said chartered financial consultant Peter Hoopis, CEO of Peter Hoopis Ventures. “You must know not only the cost of living but also the livability score. You’ll want [an] AARP livability score as close as possible to 100 and a cost of living index of less than 100. A higher livability score means more availability and better accessibility to healthcare, education, entertainment, safety and essential services.”

Hoopis recommended looking into low-cost, high-quality destinations such as Lake Charles, Louisiana; Rock Springs, Wyoming, and St. Charles, Missouri.

If You Never Reached $50,000, Downsize Whatever You Own

About 20% of people have just $10,001 to $50,000 saved. That’s enough to keep you afloat for a while, but not for long. Now is the time to think about turning assets into cash.

“If you own a home, selling your home or getting a reverse mortgage can help you generate cash during retirement,” said Danielle Miura, CFP, founder of Spark Financials.

Make sure to wring all you can out of any non-traditional assets you may have as well.

“Anyone over the age of 65 should consider the safe option of selling all or a piece of their life insurance to boost retirement, help pay medical bills or fund long-term care,” said Brandon Selfors of Bridge Insurance Group. “Life insurance often becomes a liability and selling is one option to consider before surrendering or lapsing a policy.”

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If You Have Less Than $10,000, Plan for Semi-Retirement

Sadly, the largest plurality of respondents to the poll — nearly one in three — had less than $10,000. In almost all of those cases, leaving the workplace entirely just won’t be feasible.

“For many people, retiring completely is simply not an option,” said Linda Chavez, CEO of Seniors Life Insurance Finder. “Working during retirement may not be what you envisioned, but it can still be a great way to supplement your retirement income and make the most of your golden years.”

She recommends looking for work that offers flexibility so you can make the most of your time off and keep contributing to your savings as you go. Before you do anything, ask your current employer about phased retirement.

Also, delay enrolling in Social Security for as long as you can until the incentive stops at 70.

“Waiting is valuable since your monthly benefit will increase with every year you wait,” said Jeff Wright, co-founder and COO of Sagewell Financial. “We find a good start is to create your SSA account to understand what your different benefit amounts will be and then consult with an expert to talk about how you can enroll in Social Security on your terms.”

Avoid Big Risks in Pursuit of Big Gains

Being long on age and short on savings is a scary feeling; but, whether you have $10,000 or $200,000, slow and steady still wins the race.

“If you are approaching retirement and do not have enough saved, you need to focus on spending,” said Greg Wilson, a chartered financial analyst and founder of Cha Ching Queen. “Personal finance is just a ratio of income over expenses. You want the ratio to be greater than one. If it isn’t, you need to raise the numerator or decrease the denominator. It is going to be hard, but you need to find ways to decrease the denominator.”

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Decreasing the denominator — reducing spending — is challenging. You might be tempted to trade the chore of budgetary belt-tightening for the investing equivalent of going all-in on one big hand of blackjack, like crypto or the latest trending biotech stock. Don’t.

“Whatever you do, don’t chase risky investments,” Wilson said. “You don’t want to put yourself further in the hole gambling on something with a high-risk, high-return profile.”

More From GOBankingRates

Methodology: GOBankingRates surveyed 997 Americans aged 18 and older from across the country between Aug. 9 and Aug. 11, 2022, asking 16 questions: (1) How much money do you currently have saved for retirement?; (2) How much money do you think you’ll need to retire?; (3) Realistically, at what age do you want to be retired?; (4) At what age did you start saving for retirement?; (5) What worries you financially about retirement? (Select all that apply); (6) Do you plan to work in retirement?; (7) What assets do you have in your retirement portfolio? (select all that apply); (8) How has the current inflation impacted your retirement plans?; (9) How much of your retirement do you plan to fund with Social Security?; (10) How do you feel about the future of Social Security when you retire?; (11) What percentage of your salary are you currently investing for retirement?; (12) Are you planning to move after your retirement?; (13) Where is your ideal place to retire?; (14) What government programs do you plan to use for your retirement? (select all that apply); (15) Do you have a pension plan?; and (16) How much do you think the average American has saved at the time they retire? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

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