60 Years Old and No Retirement Savings? What to Do If You Retire Broke

Planning Is Essential If You Are Retiring With No Savings

Couple reviewing retirement savings
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Proper planning is essential to create lasting financial security in retirement. Unfortunately, many Americans are at risk of ending up 60 years old and no retirement savings in sight. According to a recent GoBankingRates survey, 42 percent of Americans are poised to retire broke because they simply aren't saving enough. Nearly half of Americans polled had less than $10,000 set aside for their later years. 

If you're reached retirement age with less money saved than you anticipated—or worse, no money saved at all—that can be worrying but it's not time to panic. It's still possible to enjoy financial stability in retirement even if you're starting from zero; it just requires a sound financial plan

Take Stock of Your Assets

Getting a grip on where you stand in retirement from a financial perspective begins with a careful evaluation of your assets. That includes cash savings, pension funds owed to you by your employer, annuities you've purchased and tax-advantaged accounts, such as a 401(k) or individual retirement account

If you're retiring with none of these things in place, your financial picture likely looks very different. In this scenario, you may need to look beyond savings and investment accounts to any physical assets you own that may hold value, such as your home, cars, antiques, collectibles or land. 

In the case of things like cars, land or antiques, those can be sold to generate cash that you can add to retirement savings. If you've paid off your home, or are close to being mortgage debt-free, selling it could be another major source of retirement funds. It's important to have a clear idea of what you own—and what you can afford to do without--when you have nothing in savings for retirement. 

Reduce Spending and Streamline Your Budget

This should go without saving but if you're 60 years and no retirement savings are waiting in the wings, you'll need a watertight budget to make retirement work. The best time to plan your retirement budget is when you're still working so you have time to make adjustments but if you've recently retired, it's not too late. 

Review your spending line by line to look for things you can reduce or eliminate. Downsizing your home has already been mentioned as a way to reduce housing costs but if you're looking for more ways to save on spending, you might also consider:

  • Selling your car and swapping it out for ride-sharing services to eliminate your car insurance bill
  • Getting rid of your land line telephone if you still have one and reducing your cellphone package to the lowest one available
  • Raising the deductible on your homeowners' insurance policy to lower your premium costs
  • Taking advantage of senior discounts whenever available
  • Signing up for Medicare as soon as you're eligible to reduce out-of-pocket health care spending
  • Opting for generic products versus name-brand whenever possible
  • Making some inexpensive home improvements to increase energy efficiency and reduce utility bills, such as purchasing a programmable thermostat or replacing the insulation in your attic

If you're headed into retirement with debt, paying it off while balancing a reduction in your expenses can be tricky. If reducing your spending allows you to put some money back into your budget, it may be tempting to put it all towards debt. But, you need to have a cushion of cash savings for emergencies. If you're on the fence about how to use the extra money in your budget, the best option may be to split the difference between savings and your debt payoff. 

One other big expense you may need to address if you're retiring broke is helping adult children or grandchildren financially. If you've given this kind of help freely in the past, continuing to do so may not be realistic or possible in retirement when you have no savings to fall back on. While you aren't obligated to share the gory details of your finances with your children, you should make it clear that you can no longer be expected to offer the money if you're struggling to handle your own expenses in retirement.


Focus on Building Income Streams

If you're retiring with no savings, Social Security is probably going to be your primary source of retirement income. You can receive benefits as early as age 62, but that results in a reduction of your benefit amount. If you're taking benefits early, it's to your advantage to consider how you can create other income streams. 

Working part-time is one option. You do, however, need to be aware that working while claiming Social Security may result in your benefits being temporarily reduced if your earnings exceed the allowed threshold. Starting a side hustle is another possibility but it can allow you to use your existing skill set to create an income without having to fully re-enter the workforce. 

Finally, your home can be a potential source of retirement income. If you've built up a substantial amount of equity, you could draw on it through a home equity loan or line of credit, or using a reverse mortgage. The difference between the two is that a loan or line of credit must be repaid by you; a reverse mortgage generally doesn't require payments to be made unless you're no longer living in the home. When you pass away, your heirs would be responsible for repaying a reverse mortgage outright to keep the home, or selling it and using the proceeds to repay it.


If that doesn't appeal to you, you could consider renting out a room or part of your home on Airbnb. Just remember to check the zoning laws where you live to make sure it's allowed. Also, don't forget to consider the tax implications of claiming Airbnb rental income.