How Baby Boomers Will Support Themselves Once They Can No Longer Work

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Man pushing a woman in a wheelchair
GWImages /

Whether you can’t wait to retire or plan to remain at your desk for as long as possible, a sobering reality remains: For many of us, there will come a day we no longer are able to work.

Perhaps illness keeps you from holding a job. Or maybe age discrimination — despite being technically illegal — bars you from decent employment. Whatever the reason, it is likely that at some point, the job income will dry up.

What will you do then? Investopedia asked thousands of adults — including baby boomers ages 58 to 76 — to describe how they will support themselves financially once they are no longer able to work.

Following are the top sources of money baby boomers plan to tap when work disappears.

13. Bonds (three-way tie)

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Percentage planning to use this for income: 5%

Bonds have a long history of providing retirement income for retirees. Particularly in previous generations, those in their golden years who shunned risk often put their money — and their retirement hopes — in government bonds.

Some retirees still use this strategy, but it has become less attractive as boomers and others have gravitated toward stocks. Bonds offer a measure of safety, but remember that their lower returns tend to leave retirees who choose them more vulnerable to inflation.

Looking for a stellar return on bonds? Check out “This Government Bond Now Pays 9.62% — Should You Buy?

13. My children or relatives will care for me (three-way tie)

A senior father has a serious conversation with his adult son
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Percentage planning to use this for income: 5%

When all else fails — your investments and savings go south, your spending goes north and debts continue to pile up — you can always look to Junior to bail you out.

You took care of your kids for 18 years or more. Consider it payback time.

Unfortunately, the reality today is that it is more likely that parents will take care of children well into adulthood than the other way around, as we detail in “8 Things You Should Not Do in Retirement.”

13. Cryptocurrency (three-way tie)

cryptocurrency bitcoin
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Percentage planning to use this for income: 5%

Some might think boomers would deem cryptocurrency to be faddish, insisting that it is a young person’s game. But 5% of boomers appear to be intrigued by Bitcoin and its cohorts.

If digital currency has piqued your interest, check out “9 Surprising Things You Can Buy With Cryptocurrency.”

12. Cash-value life insurance plan

Senior man holding money
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Percentage planning to use this for income: 6%

The promise of cash-value life insurance is that you can tap the money at some point to pay for expenses or fun.

Critics say cash-value insurance is not a great investment, but others disagree. Wondering if this is the right option for you? Check out “Which Is Better: Term or Whole Life Insurance?

11. Inheritance

Last will and testament
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Percentage planning to use this for income: 7%

Some baby boomers were fortunate enough to receive an inheritance somewhere along the line. Those who were especially wise decided to squirrel away that money for their golden years.

If you are among the lucky folks to inherit money, check out “7 Steps to Make the Most of an Inheritance.”

10. I don’t know

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Percentage planning to use this for income: 9%

Hey, let’s give these folks points for honesty! Sometimes, you’ve just got to admit that you are clueless about the future. And that’s OK.

But having a plan is so much better. If you don’t know how you’re going to afford retirement, enroll in the Money Talks News course Money Made Simple. MTN founder Stacy Johnson leads you through the steps that will secure your golden years.

9. Real estate investments

House for rent
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Percentage planning to use this for income: 10%

Anybody who has bought a home or rental property in the past decade is likely very happy with their decision today. And while there is no guarantee that home prices will continue to rise, people will always need places to rent.

Purchasing a rental property is one of the most lucrative ways to generate income in retirement. But it is not your only option. We highlight some alternatives in “12 Ways Retirees Can Earn Passive Income.”

8. Annuities

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Percentage planning to use this for income: 11%

Annuities seem to be among the most unloved of retirement income solutions. But many experts say the right type of annuity can play a key role in securing retirement for millions.

Money Talks News founder Stacy Johnson goes over the pros and cons of this option in “Should You Buy an Annuity? The Pros and Cons.”

7. Mutual funds

Mutual funds
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Percentage planning to use this for income: 13%

If you have invested any amount of money in the stock market, chances are good that at least some of that cash — if not most of it — is parked in mutual funds.

Markets go up and down, but it’s a safe bet that those investments will provide a substantial amount of income during retirement. So, as you tap your accounts to pay for your next cruise, be sure to tip your cap to John Bogle, the father of the index mutual fund and one of the great heroes of average investors everywhere.

Read more about Bogle in “Investing Pioneer Showed Us How Fees Rob Our Retirement Funds.”

6. Disability benefits

Senior woman in a wheelchair
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Percentage planning to use this for income: 14%

If long-term illness or injury has prevented you from working for a long time, you probably thank your lucky stars for disability benefits. Without such funds, you might be staring at a very grim retirement indeed.

For more on this topic, check out “Are Social Security Disability Benefits Taxable?

5. Investing in the market

Stock bull
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Percentage planning to use this for income: 16%

If housing has been good to people in recent years, the stock market has been amazing. Despite recent struggles, the market has produced huge returns since 2009.

So, it’s no surprise that many boomers are counting on their investments to see them through retirement. Let’s hope their expectations are realistic. The market giveth, and it also taketh away.

4. Savings or CDs

Smiling woman with piggy bank
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Percentage planning to use this for income: 22%

The stereotype of a retiree is someone stuffing money into savings accounts, CDs, bonds — and maybe a few dollars into their mattress.

Boomers have overturned those stereotypes, but a fair percentage still value the safety and stability of conservative investments.

If you are among them, stop by our Solutions Center and search for a great savings account rate.

3. Pension

Seniors playing games together
LightField Studios /

Percentage planning to use this for income: 27%

Relatively few Americans still have pensions from their employment, but those who do can sleep much easier in retirement than many of their peers without pensions.

If you are a younger worker who longs for a pension, maybe it’s time to explore making a new location home. For more, read “The 10 Best Countries for Pensions.”

2. 401(k)

401(k) retirement nest egg
Andrey_Popov /

Percentage planning to use this for income: 28%

After decades of deferring gratification — and taxes — by stuffing money into your 401(k), retirement is the time you finally get to reap what you have sown.

More than one-quarter of folks plan to use their 401(k) to fund retirement. To make that money last, they will need to draw down their accounts prudently. If that thought scares you, stop by our Solutions Center and find a great financial adviser who can help.

1. Social Security

Social Security payments
Steve Heap /

Percentage planning to use this for income: 70%

Social Security long has been a lifeline for millions of America’s retirees. Nearly three-quarters of survey respondents say the government retirement program will play a key role in providing the funds to get through their golden years.

Deciding when to file for benefits will play a major role in how efficiently Social Security will finance your retirement. So, stop by our Solutions Center and discover expert advice that can help you plan a great Social Security strategy.

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