I’m Retired: My 3 Best Money Tips for Supplementing Social Security

Social Security is a safety net meant to replace some, but not all, of your pre-retirement income, as a way to ensure that people don’t fall into poverty in retirement . However, for some people, it ends up being their only income for a variety of circumstances, making it challenging to figure out how to survive.

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Some retirees come up with creative ways to supplement their Social Security when they can’t rely on retirement accounts or pensions.

Eldonna Edwards, a retired former certified massage therapist and author based in California, retired at age 62, the earliest age that you can typically receive Social Security. She started living primarily on these benefits. Though she has had to be creative in supplementing her income, she doesn’t regret it. Here’s how she’s done it.

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What She’s Bringing in Each Month

When Edwards first retired, she was counting on even less Social Security income than she ultimately received.

“When I first applied for Social Security I was expecting a mere $750 per month, but because my ex-husband had recently passed, I receive widow’s benefits based on his earnings, which doubled my monthly benefit,” she explained.

Now, after her Medicare is deducted, she takes home about $1,450 per month. While that is more than she expected, it is still not nearly enough for her to actually live on by itself. She has to supplement that income.

“Other than scant book royalties — around $1,500 per year — the only way for me to afford to live in my own home is to rent out rooms. I currently rent out two bedrooms to students for $1,300 each per month, however, I pay for all utilities, which brings the net rent down to about $1,175 per room.”

Open Your Home

With a $1,300 a month mortgage payment and $8,000 annual property taxes, she described it as “impossible” to live on Social Security alone.

Edwards recommended that other retirees consider opening their homes as a way to bring in income.

“I know other retirees who Airbnb their homes or rent to traveling nurses. I happen to live near a university so I rely on students but there are other options out there. Just be sure to properly vet potential housemates — background check, credit report, references — before allowing someone into your home.”

She is very clear that without renting out rooms, she would not be able to live as she does on her limited Social Security income.

“I would have to sell my home and likely move into a tiny mobile home or apartment somewhere more affordable.”

While sharing her home has come with losing some autonomy and privacy, she said she’s also found that students bring her home alive with energy, often resulting in friendships that have lasted decades.

“I enjoy getting to know these young individuals, and there is satisfaction in providing a safe, comfortable space for them during their college years.”

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Don’t Think You Need More Than You Do

Frugal living is nothing new to Edwards. As a single parent for many years, she said she always lived frugally by choice and necessity, claiming she could “stretch a dollar around the block and back.”

Ultimately, she’s found that living on less is not so bad.

“I’ve learned that it’s easy to get sucked into thinking we need a lot more than we actually do. I don’t need three to four streaming services, the latest phone, monthly pedicures, designer clothes. I cut my own hair, paint my own toes, and shop at thrift stores.”

Focus On Quality of Life

Loss of income is a worthy trade for her because retirement has given her a “precious gift” of freedom to spend each day without a work schedule.

Nonetheless, she feels the constraints of retirement life.

“I have very little savings; most of my assets are tied up in my equity. At one point I put my home on the market before quickly realizing that I could not afford to buy another home without moving out of state,” she said.

She moved to San Luis Obispo, California, from Michigan 27 years ago, escaping the long cold winters and short but mosquito-ridden humid summers.

“I love the central coast of California and I’m more than willing to make small sacrifices to enjoy living here in paradise. As I sit here writing these words, in the shadow of Cerro San Luis Mountain just outside my window, I’m filled with gratitude for the life I’ve created here.”

Other Ways To Supplement Social Security

Here are some other tips experts have if you’re worried about living on Social Security alone.

Transform Talents Into Side Hustles

Joseph Eck, CFP and owner of Stage Ready Financial Planning , said that it is common for retirees to supplement their Social Security or pension income by creating side hustles in retirement.

“In almost every case, the client is taking something they previously did during their working years and turning it into extra retirement income. Some great examples include former government employees working seasonally for their county board of elections office during voting season to run the voting polls, or former music teachers who retired and now supplement their retirement income by repairing instruments for students in the community and purchasing damaged instruments that they can repair and resell at a great price.”

Downsize

Marty Burbank, an elder law attorney and owner of OC Elder Law , has helped numerous clients supplement their Social Security incomes.

“The most effective strategies I’ve seen are downsizing to reduce living expenses, and maximizing benefits like the VA Aid and Attendance benefit,” he said.

“For downsizing, selling a large family home and moving into a smaller place or senior living community can free up significant equity to generate income.”

The funds can then be invested to provide annual returns of 3% to 5%, which can add $10,000 to $15,000 or more per year.

Veterans: Take the VA Aid and Attendance Benefit

The VA Aid and Attendance benefit provides up to $23,000 per year for veterans and spouses to pay for care and living expenses, Burbank said.

“Many veterans don’t realize they qualify, but with proper documentation of medical conditions and costs, I’ve helped clients secure this benefit and use it to supplement Social Security by over 50% annually.”

With some creativity, though Social Security may be your primary income, it doesn’t mean it has to be your only one.

This article originally appeared on GOBankingRates.com : I’m Retired: My 3 Best Money Tips for Supplementing Social Security