Top 4 Unique Retirement Income Sources to Complement Your Social Security Income in 2025
In 2025, the typical Social Security beneficiary is predicted to receive approximately $23,712. This sum may be substantial, but it's generally insufficient for many individuals to live comfortably. Married couples may find themselves in a slightly better position due to having two income sources, but they'll probably still seek additional income sources for financial security.
The path to retirement funding isn't a single route; there are several options available. Let's examine four potential income sources for your retirement planning:
1. Personal savings
Dedicating portions of your paychecks towards savings is one of the most beneficial methods if you can afford it. Even if your savings are tax-deferred in accounts like traditional IRAs and 401(k)s, they eventually become yours to manage. Bank accounts, workplace retirement plans, IRAs, and self-employed retirement accounts are all considered personal savings. Holding some money in cash is wise if you plan to retire within a few years. However, investing your savings for the future is generally the best strategy for growing your buying power. While there's a risk of loss, this is the most promising approach to expanding your wealth over time.
2. Health savings account (HSA) funds
Health savings accounts (HSAs) were initially designed to pay for out-of-pocket medical expenses but have evolved to serve as a powerful retirement savings tool. Just like traditional IRAs and 401(k)s, HSAs offer tax benefits, with tax-free withdrawals for medical expenses at any age and tax-deferred growth. To qualify for an HSA, you must have a health insurance plan with a minimum deductible of $1,650 for individuals or $3,300 for families. Limits for contributions vary depending on the account type and plan, but you can contribute up to $8,550 for families in 2025. Adults 55 and older can add an extra $1,000 to these limits.
If you choose to use HSA funds for retirement, try to avoid withdrawing them early for medical expenses. Instead, utilize investments to grow your funds before retirement. If you plan to rely on your HSA for retirement, prioritize investing your funds to maximize their worth.
3. Income from a job
Many retirees opt to work part-time or full-time to supplement their retirement income, either because they need additional funds or to maintain social connections. Job seekers in retirement don't need to restrict their choices to past careers. In fact, you may find more satisfying and flexible options that suit your current goals. Retirees can also spread out their working years by transitioning to part-time positions or taking a break before returning to the workforce if needed.
4. Rental income
If you own properties, renting out spaces—whether on a short-term or long-term basis—can serve as a valuable source of passive income. However, owning rental properties comes with responsibilities, such as managing property maintenance and repairs. If you're not comfortable performing these tasks, renting might not be the most suitable choice for you. Additionally, you can generate income by renting out other assets, such as your personal vehicle. Make sure you have the proper insurance coverage before proceeding with such strategies.
Multiple sources of retirement income—including Social Security benefits, personal savings, HSA funds, job income, and rental income—can significantly strengthen your financial security. By carefully considering your options and implementing a well-balanced plan, you can optimize your retirement savings and ensure a more secure future.
Incorporating retirement planning with your finance and money management is crucial, especially since Social Security benefits may not be enough to sustain a comfortable lifestyle. For instance, you can allocate portions of your income toward personal savings, which can grow through investments, providing a stable source of income during retirement.
Furthermore, you might consider using health savings account (HSA) funds as a retirement income source, especially if you meet the eligibility criteria. By investing your HSA funds, you can potentially maximize their worth and secure a substantial income during retirement.
