The average Social Security beneficiary will receive about $23,712 in 2025. While that’s a good chunk of money, it’s not enough for most people to live off of comfortably. Married couples might fare a little better because they’ll have two checks instead of one, but even so, you’ll probably wish you had other sources of income to fall back on.
There’s no one right way to fund your retirement. Here are four common retirement income sources you might want to include in your plan.
1. Personal retirement savings
Personal savings are your best option if you’re able to give up any of your paychecks today. You may still owe the government a cut in retirement if you contribute to tax-deferred accounts, like traditional IRAs and 401(k)s, but otherwise, the money is yours to spend how you’d like. This freedom makes savings the ideal Social Security supplement.
Personal savings include money in your workplace retirement plans, IRAs, and self-employed retirement accounts, as well as bank accounts. You may want to keep some money in cash if you plan to retire in the next couple of years. But otherwise, it’s best to invest your money for the future. There is a risk of loss, but it’s the best way to grow your buying power over time.
2. Health savings account (HSA) funds
Health savings accounts (HSAs) were created to help people pay for out-of-pocket medical expenses. But they’ve also become a popular way to save for retirement because they offer the same upfront tax break and tax-deferred growth that traditional IRAs and 401(k)s do. Plus, you get tax-free medical withdrawals at any age, though nonmedical withdrawals are taxable and carry a 20% penalty under 65.
To contribute to an HSA, you must have a health insurance plan with a deductible of at least $1,650 for an individual or $3,300 for a family. You may save up to $4,300 here in 2025 if you have a qualifying individual plan or $8,550 with a qualifying family plan. Adults 55 and older can add another $1,000 to these limits.
If you plan to use your HSA funds for retirement, it’s best not to withdraw them early for medical expenses, even though you’re allowed to do so. You probably also want to invest your HSA funds so they’re worth more by retirement.
3. Income from a job
Some retirees work a full- or part-time job in retirement, either because they need a steady stream of income to supplement their personal savings and Social Security checks or because they like the opportunity to socialize and contribute in a meaningful way.
If you decide to look for a job in retirement, remember that you don’t need to choose something in the same industry you spent your career in. If you only need a little money to cover your monthly bills, you may be able to find a job that’s more flexible and suits your interests.
You also don’t have to work for your entire retirement. You could take a job for a few years and slowly reduce your hours before exiting the workforce completely.
4. Rental income
Those who own property could earn some extra money by renting it out, either on a short-term basis for vacationers or to long-term renters. However, if you do this, you have to be prepared to take on the work that comes with being a landlord. This might include cleaning the property between renters or arranging for repairs if something breaks. If you’re not comfortable with this, renting might not be the right choice for you.
You also might be able to earn some income renting out other items, like your car. Just make sure you have the proper insurance before going ahead with this strategy.
It’s fine to opt for more than one of these retirement income sources if you want. The more sources of retirement income you have, the more likely you are to be able to maintain your standard of living for the rest of your life.
