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

We’re only a few days away from the announcement of the 2025 Social Security cost-of-living adjustment (COLA). It’s a big deal for seniors who have been battling high inflation over the last few years. But it’s unlikely that the COLA is going to be life-changing. The latest projections from the nonpartisan Senior Citizens League are for the COLA to come in around 2.5%. That would add $48 to the $1,920 average monthly Social Security benefit as of August. If you’re a Social Security recipient and this won’t be enough to maintain your current standard of living, you might need to call upon some of the following four alternative sources of retirement income.

1. Personal savings

Personal savings are your go-to, if you have them. You withdraw as much as you need to cover whatever expenses arise, which makes them the most flexible source of retirement income you have. But no matter how much is in your account, it’s still a finite resource. You need the right retirement withdrawal strategy to help your savings last as long as possible. This includes withdrawing just 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’re over 73, you must consider the effects of required minimum distributions as well. You also want to pay careful attention to how you invest the money that remains in your account. You might want to keep some money in a bank account or certificate of deposit, where you can access it easily. But you also want some of it invested in bonds and the stock market, so it can continue to grow. Just be sure to err on the side of caution. At this stage, it’s important to protect what you have managed to save.

2. Income from a job

If you are healthy enough to work, you could get a full- or part-time job to help make ends meet. This doesn’t have to be in the same line of work you were in before retirement; you can choose something that’s more in keeping with your interests today. It doesn’t have to provide a lot of money, either, as long as it’s enough to cover what your Social Security checks and personal savings cannot. Depending on your needs and your employer, you might be able to get by with working just a few days per week. Remote work is an option for people who want to travel in retirement. Starting your own business can be risky. There are usually up-front costs, and if that business were to fail, it could leave you in a worse position than you’re in now. Understand all the costs associated with starting a business and be prepared to take the risk before going ahead.

3. Rental income

Retirees who own extra properties might be able to earn some money by renting them out. This can be especially valuable if you own the property outright. However, you’ll still be responsible for maintenance. Traditional, long-term rentals could be the way to go if you’re looking for something predictable. But short-term vacation rentals are an option as well, especially if you live in a popular tourist destination. Short-term rentals might need extra attention from you, though, since you’ll have to inspect and clean the place between guests. But you can hire someone to do this for you.

4. Government assistance

It’s a method of last resort, but if you’re not able to cover your living expenses any other way, check to see whether you qualify for other government assistance programs. These are generally administered on the state level, though 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 criteria you have to meet regarding income, and you might have to recertify your income periodically to ensure you’re still eligible.

Prepare a budget

You may need a combination of these four income sources to make ends meet. Once you know what your 2025 Social Security check will be, you can start planning for what it doesn’t cover. Revisit 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 spending or increase your income to find a balance that is comfortable for you.