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Retirement Hacks: Consider stretching out your retirement savings by doing this


The three legs of the “three-legged stool” for retirement income, consisting of Social Security, a pension and a worker’s own retirement savings, has been wobbly in recent years, but it might not be if it had a fourth leg – extra income in retirement. 

Retirement Tip of the Week: When you’re thinking about what income you’ll have in retirement, try to find an additional reliable source of income, be it part-time work, consulting or the occasional gig. It will keep your retirement accounts fuller for longer. 

Retirement used to be seen as a time when an individual would leave the workforce for good, then spend their days with their grandchildren or traveling before they were too sick to do so anymore. 

Read: I took Social Security at age 62 and now I regret it. Is there a way to increase my Social Security benefit?

But the landscape has changed. People aren’t waiting for their 65th birthdays to retire, are living much longer, and there’s no clear blueprint for when or how to retire. 

See: One simple thing to do in your 50s to add 5 years to your nest egg 

Regardless of the reason, the more money coming into a bank account during retirement, the less money being taken out of a 401(k) or IRA – and that means those dollars can stretch for years to come, generating more in returns and interest along the way. Considering many employers have moved away from pensions, and Americans sometimes underestimate how much money they need for retirement or don’t believe Social Security will be there in their old age, this fourth leg could be a savior. 

Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

For retirees who can’t work, or just simply don’t want to, try to find other ways to stretch your retirement accounts. Rely more heavily on Social Security or a pension, or live a modest lifestyle in the first few years of retirement so you’re withdrawing less money. During times of volatility – as the stock market is experiencing right now – withdrawing less could help preserve a 401(k), as it prevents the sequence of returns risk, which is the possibility of running out money based on the order in which withdrawals were made. 

One of the good things about working, if only temporarily in retirement, is the flexibility and control that comes with it. If a retiree has saved a sufficient amount of money for the future, it may not matter if he takes on a job that earns less than he used to earn (such as if he’s considered entry level in an entirely new field). Retirees may also be able to control how many hours per week they work. 

Also see: How to make your retirement savings go farther

There are plenty of job postings in retail, hospitality and teaching, one study found, or a retiree may also try creating a shop on Etsy or Instagram to sell their artwork or services. 

Other avenues include volunteering, which may eventually lead to a part-time job, or networking with colleagues and friends in their industry of choice. AARP has a job site, but there are plenty of other job boards available. 

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