4 sources of retirement income besides Social Security to rely on in 2025

We are just days away from the 2025 Cost of Living Adjustment (COLA) announcement. It’s a big deal for seniors who have struggled with high inflation over the past few years. But COLA is unlikely to be life-changing.

The latest projections from the partisan Senior League have the COLA coming in at around 2.5%. That would add $48 to the average monthly Social Security benefit of $1,920 as of August.

If you are on Social Security and this will not be enough to maintain your current standard of living, you may need to turn to some of the following four alternative sources of retirement income.

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1. Personal savings

Personal savings are your choice if you have them. Withdraw as much as you need to cover any expenses that arise, making it the most flexible source of retirement income you have. But no matter how much is in your account, it’s still a limited resource.

You need the right retirement withdrawal strategy to help your savings last as long as possible. This includes withdrawing as much as you need and choosing the right accounts to withdraw from. Tax-deferred retirement accounts like traditional IRAs and 401(k)s require you to pay taxes on your withdrawals, while Roth withdrawals are generally tax-free in retirement. If you are over age 73, you must also consider the effects of required minimum distributions.

You also want to pay close attention to how you invest the money that remains in your account. You may want to keep some money in a bank account or certificate of deposit where you can access it with ease.

But you also want some of it invested in bonds and the stock market so it can continue to grow. Just make sure to err on the side of caution. At this stage, it is important to protect what you have managed to save.

2. Income from a job

If you are healthy enough to work, you may be able to get a full-time or part-time job to help you get by. This does not have to be in the same field of activity that you were in before retirement; you can choose something that is more in line with your interests today.

Nor does it have to provide a lot of money, as long as it’s enough to cover what your Social Security checks and personal savings can’t. Depending on your needs and your employer, you may be able to get by working just a few days a week. Telecommuting is an option for people who want to travel in retirement.

Starting your own business can be risky. There are usually upfront costs, and if that business were to fail, it could leave you in a worse position than you are now. Understand all the costs associated with starting a business and be prepared to take the risk before proceeding.

3. Income from rent

Retirees who own additional properties could earn some money by renting them out. This can be especially valuable if you own the property. However, you will still be responsible for maintenance.

Traditional, long-term rentals might be the way to go if you’re looking for something predictable. But short-term vacation rentals are also an option, especially if you live in a popular tourist destination.

However, short-term rentals may require extra attention from you as you will need to inspect and clean the place between guests. But you can hire someone to do it for you.

4. Government Assistance

It’s a last resort, but if you can’t meet your living expenses any other way, check to see if you qualify for other government assistance programs. These are generally administered at the state level, although you can see if your local community offers assistance as well.

Government programs are there to help with food, housing, utilities and healthcare. There are income criteria you must meet and you may need to re-certify your income periodically to ensure you are still eligible.

Prepare a budget

You may need a combination of these four sources of income to make ends meet. Once you know what your Social Security check will be in 2025, you can start planning what it doesn’t cover. Review this budget after a month or two to make sure it’s still working for you.

If not, you will need to either reduce your expenses or increase your income to find a balance that is comfortable for you.