The 6 Most Common Sources of Retirement Income

While it would’ve been nice to make big investments in Apple or Amazon stock 20 years ago, most of us rely on a variety of income sources in retirement.

A recent U.S. Census Bureau analysis breaks down exactly how households led by people age 65 or older pay for their golden years, with a focus on a handful of income types.

Here’s a look at each category of income and how prevalent it is for retirees.

6. Supplemental Security Income

Older households that receive this type of income: 4.5%

Supplemental Security Income, or SSI, is a program overseen by the Social Security Administration but distinct from Social Security benefits. It’s designed to help seniors or blind or disabled people who have little other income.

Relatively few people rely on this income; most have other sources to tap.

5. Earnings from work

Older households that receive this type of income: 22.8%

“Although the majority of people aged 65 or over are retired or otherwise out of the labor force, many older adults still work (20.4%) or live with someone who does (16.3%),” the Census Bureau says.

Whether full-time or part-time, a job can keep the money flowing and the brain engaged, not to mention sustain an active social life. For more on the benefits of working in retirement, check out “5 Reasons You Should Work for as Long as You Live.”

4. Other income

Older households that receive this type of income: 25.4%

This isn’t really one single category of income, but instead a bunch of smaller ones the Census Bureau lumped together. It includes unemployment insurance, workers’ compensation, veterans’ payments and other cash income sources such as financial support from friends or family.

3. Pension and retirement-account income

Older households that receive this type of income: 52%

This category covers retirement plans such as defined-benefit pensions, life insurance and annuities. It also includes defined-contribution plans like the ever-popular 401(k) and other common ways to save for retirement, like individual retirement accounts (IRAs).

2. Property income

Older households that receive this type of income: 60.2%

Most senior households also receive income through property in one way or another. This category includes rent, interest, dividends and other income derived from assets besides retirement accounts.

1. Social Security income

Older households that receive this type of income: 91.5%

Last but certainly not least is Social Security.

The Census Bureau finds that money from Social Security benefits is common across older households of all income levels, although lower-income senior households rely more heavily on it.

Assuming you’re not fabulously wealthy and drawing Social Security just because you can, check out “12 Ways to Maximize Your Social Security Checks” so you can make the most of it.

How to increase your retirement income

Regardless of the sources, can you confidently say you’ll have enough money for the retirement you want? If not, take proactive steps to boost your income while you can. Here are a few tips:

• Learn how to maximize your Social Security. There are a lot of quirks to the system, including knowing when to file your claim (you’ll get bigger payments if you delay, up till age 70) and how spousal, divorce and survival benefits work.
• Look for ways to protect your income from taxes, such as through a Roth 401(k) or IRA.
• Recognize that retirement doesn’t necessarily mean the end of work, especially if you enjoy it. Here are some excellent part-time jobs for retirees.
• Weigh other options for steady retirement income, such as annuities and reverse mortgages. There are drawbacks to each, but they might fit your situation.

If you can’t realistically increase your retirement income much more, check out “15 Ways Retirees Can Stretch Their Savings.”