Retiring With No Savings? 3 Tips For Living On Social Security

If you'll finance most or all of your retirement with Social Security benefits, you're not alone. In fact, Social Security comprises 90 percent of the incomes of nearly one-quarter of married seniors and almost half of single ones, according to There's no getting around the fact that you'll need to budget carefully and live frugally. However, there are things you can do to help make up for lack of retirement savings.

1. Use Your Home Equity

A reverse mortgage is a type of refinance available to individuals 62 and older. It allows you to borrow against your home equity, and it guarantees that you can stay in your home for as long as you live there. The loan becomes due upon your death or after you've moved from the home and lived elsewhere for 12 months.

With a single-purpose reverse mortgage, you borrow a lump sum to pay a single large expense such as a major home repair. Home equity conversion mortgages are more flexible, offering lump-sum or monthly payment options, and they're insured by the U.S. Department of Housing and Urban Development. Some mortgage companies, like as Liberty Escrow Inc, underwrite their own, proprietary reverse mortgages, too.

Although these loans have some drawbacks, the HECM monthly payment loan in particular is a safe, government-backed option that can serve as a much-needed, long-term supplement to Social Security.  The income doesn't affect your benefits, and you get the money tax-free.

2. Retire Later

Retiring at 62 decreases your Social Security benefit by 30 percent if your full retirement age is 67, according to the Social Security Administration, but you'll lose significantly less if you delay retirement for a few years. Alternatively, you can start collecting before you reach full retirement age, and then withdraw your claim and reapply to collect at the full amount. You must withdraw your claim within 12 months of your initial retirement, however.

3. Supplement Income with a Home-Based Business

Chances are, you have a hobby or interest you can turn into a part-time, home-based business. Making and selling art or crafts, reselling thrift items, teaching an online class or offering babysitting or eldercare services are just a few ways retirees earn extra money doing work they enjoy in their free time.

Home-based workers earn tax benefits for the business use of their homes and cars. Moreover, you have full control over your earnings, so you can limit them to the maximum you can earn without affecting your Social Security benefits.

Living on a shoestring budget isn't easy, but by managing your finances carefully and using your financial and personal resources to make more cash available to you, there's no reason your golden years can't be fun and gratifying.