What To Do When You Have Little to No Money in Retirement

Shot of a senior man looking stressed while doing the household finances on a laptop in his kitchen.
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If you retired in 2021 or before, your nest egg might have seemed big enough to carry you into eternity. But the downturn of 2022 sent stocks deep into bear territory and annihilated the crypto market. At the same time, interest rates soared to 20-year highs as a remedy against inflation that remains at a 40-year high. 

Read More: Jaw-Dropping Stats About the State of Retirement in America
See: 5 Things You Must Do When Your Savings Reach $50,000

Today, you might be watching that once-proud nest egg dwindle with terrifying speed as you stress about having no money in retirement. 

If you’ve already retired and your accounts are shrinking faster than you ever thought possible, consider the following options. 

Stop, Breathe and Call a Professional 

If you’re struggling to make your money last in retirement, it’s not necessarily because you planned poorly, but seek professional help the second time around — you probably won’t get a third crack at it.

Money struggles come with high stress and grinding anxiety, especially when you’re not earning a paycheck. Considering your situation, you’re susceptible to making emotion-based financial decisions that will probably only dig you deeper into your hole. 

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Before you do anything, seek out the services of someone who specializes in your situation like a:

  • Certified financial planner (CFP) with expertise in retirement planning
  • Chartered retirement planning counselor (CRPC)
  • Retirement income certified professional (RICP) 
  • Chartered retirement plan specialist (CRPS)

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Sell, Move or Downsize

If you own a home, you probably gained a good amount of equity thanks to the record hot market that defined the last few years. If you’re house rich and cash poor, you might have to bring some balance to that equation even if you had planned to age in your home.

Rising interest rates are squeezing buyers out of a cooling market. According to Forbes, home prices are already lower than they were in the spring — but lower only from their historic highs. You still have time to cash in on the appreciation that the pandemic market built.

That leaves the options of downsizing to a smaller house, downsizing to renting an apartment or — if your lifestyle and sale price allow for it — moving to a place with cheaper housing and a lower cost of living.

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Consider a HECM

Reverse mortgages can give some retirees a way to access their equity to use as income and pay their expenses while remaining in their homes. They’re not for everyone, and it’s an industry teeming with misinformation, so if you’re considering it, consider a Home Equity Conversion Mortgage (HECM) first.

HECMs are the only reverse mortgages insured by the federal government. They’re available only through an FHA-approved lender, and there are rules and qualifying factors that are different for different homeowners, but they can give you a financial out and let you keep your home. If you meet certain qualifications, you can even use money from a HECM to purchase a primary residence.

Take On a Housemate or Become One Yourself

The right housemate can take pressure off your budget and brighten up your life with the gift of good company — but how do you find the right housemate? 

Senior Homeshares is designed specifically for older adults — retirees, empty nesters, widows and widowers, etc. — looking to move into someone’s home or have someone move into theirs. It’s a full matchmaking service powered by an algorithm designed to find you just the right housemate for your lifestyle and situation.

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Sell or Borrow From a Life Insurance Policy

If you have a permanent universal or whole life insurance policy, you might be able to borrow from it to pay for your daily needs. They’re often called cash-value policies because they have a cash value that builds over time. 

According to Guardian Life, every insurer has different rules, but many will let you borrow from your policy. No money comes out of your policy — the insurer lends you the money with the policy’s cash value as collateral. You can typically borrow up to 90% of the policy’s value, and unlike most loans, you don’t have to say what you plan to do with the money and there’s no set repayment period. 

It is a loan, so you are charged interest, but the money that you leave in your policy earns interest in a tax-favored account.

Re-Enter the Workforce or Pick Up a Side Hustle

Although it’s easy for going back to work to feel like taking a step back, you might have to create a new income stream — at least until the market rebounds — to protect what you have left. The following sites are designed specifically to help seniors and retirees looking to re-enter the workforce or start a side gig, either from home or on-site: 

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.
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