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A few strategic moves to boost retirement income.

A few strategic moves to boost retirement income.


A few strategic moves to boost retirement income.


No matter what sort of lifestyle you’re planning to lead in retirement, one thing’s for sure: Having more money is preferable to having less. You’re probably aware that the more of an effort you make to fund a retirement account during your working years, the more income you stand to collect as a senior. But if your goal is to boost your retirement income, here are a few strategic moves to consider as well.

1. Hold off on filing for Social Security

Most eligible seniors file for Social Security at age 62, which happens to be the earliest age at which you can sign up for benefits. The problem, however, is that filing before full retirement age results in a reduction of those monthly benefits, which are otherwise based on your top 35 years of earnings. The only way to avoid slashing your benefits is to wait until full retirement age to file, which, depending on your year of birth, is either 66, 67, or 66 and a specific number of months.

However, there’s an even better option available if your goal is to boost your retirement income. If you hold off on claiming Social Security past full retirement age, you’ll accrue delayed retirement credits that will increase your benefits by 8% a year up until age 70. This means that if you’re entitled to a monthly benefit of $1,500 at a full retirement age of 67, waiting until 70 will give you an extra $360 a month – for life.

2. Save in a Roth IRA or 401(k)

Saving money in any tax-advantaged retirement account is a smart move. But if you want to secure a higher income stream in retirement, it pays to opt for a Roth account, whether it be an IRA or a 401(k), over a traditional one.

When you fund a traditional IRA or 401(k), you get an immediate tax break for contributing to that account, but the distributions you take in retirement are subject to income taxes. With a Roth account, you forgo that up-front tax break, but then the withdrawals you take in retirement are yours free and clear of taxes, which means you have more money at your disposal later in life.

Keep in mind that higher earners are barred from contributing directly to a Roth IRA. However, there’s always the option to fund a traditional IRA and then convert it to a Roth after the fact. And if your 401(k) comes with a Roth feature, you can take advantage of it regardless of what your income looks like.

3. Start a small business

Many seniors choose to work in some capacity during retirement to boost their income. But at that stage of life, do you really want to spend hours on your feet working a cash register, bagging groceries, or folding clothing at a local retailer? Probably not. That’s why starting your own business in retirement is a smart idea. Not only will it give you a chance to take in additional income, but it’ll give you something meaningful to do with your time.

The latter is important because retirees are more likely to suffer from depression than workers, and the reason often boils down to feeling bored and unfulfilled. Starting your own business is a great way to turn a great idea or an activity you enjoy into an additional paycheck.

The more money you have in retirement, the more freedom and flexibility you’ll enjoy. These income-boosting moves could wind up spelling the difference between savoring your golden years and struggling financially throughout them.

Do you have a plan to retire by 50?: Can you cover your healthcare?

How much you need to retire: Try 16.4 times your salary

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The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.


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