Here’s how retirees can turn $6,000 into a $150,000 retirement bonus

With an average retirement balance of just $202,000, baby boomers could find themselves squeezed for retirement income, according to new research from the Transamerica Center for Retirement Studies. Using the 4% rule for retirement withdrawals, that balance would produce $8,080 in taxable annual withdrawals, or about $670 a month.

With inflation at 8.5% at the end of July, that kind of money may not stretch retirees very far. But there’s a counterintuitive trick in which just $6,000 can help retirees preserve $150,000. That’s how it works.

For more help planning your retirement and preserving your nest egg, consider finding a trusted financial advisor.

Adding a part-time job of just 13 hours a week at the current federal minimum wage (with four weeks off per year) would allow a retiree to bring in $125 a week or $6,000 a year. If that doesn’t seem like much, do the math and divide by 4%. That’s right – the added $6,000 in annual income equals a 4% withdrawal on $150,000 in invested assets.

The result is that just a few hours of not particularly well-paid work would mean that a retiree with $202,000 in investments could live like someone with a $352,000 portfolio – equivalent to a 74% increase in their retirement nest egg.

This could be a big relief to boomers making their retirement plans. The Transamerica survey found that 34 percent of boomers said their finances took a hit during the pandemic, and 36 percent said building emergency savings is now their top financial priority. The median emergency fund between explosions was $10,000, according to the report. Typically, financial experts recommend keeping at least three months’ worth of living expenses on hand, although a six- to eight-month cash cushion is best.

The baby boom generation totals 71.6 million men and women born between 1946 and 1964. The oldest opened the retirement age in 2012, while the youngest workers in the cohort will not reach the full retirement age of 67 until 2031.

Boomers also face concerns about health care risk and longevity risk. Fidelity’s latest retiree health care cost estimate finds that the average 65-year-old retired couple today could need $315,000 — after taxes — to cover only health care costs over a roughly 20-year retirement. Improving health care means retirees can also expect to live longer, adding more financial pressure to ensure they don’t outlive their retirement savings. Today’s workers expect to live an average of 88 years, according to the survey, but 9 percent of baby boomers said they expect to live to 100.

The idea of ​​retirement is already established with boomers, with 47% saying in the survey that they plan to work in retirement. Earning extra income is also likely to be a priority for the 34% of the postwar generation who said they expect Social Security to be their primary source of retirement income.

With a tight job market – unemployment was just 3.6% in July – retirees looking to find work should find employers waiting with open arms. Employers are much more open to hiring older workers than in the past, and a growing number of large companies are creating “returns” for older workers who want to move into a new field or type of work. And exiting — where retirees decide to rejoin the workforce after a year — is a notable trend, with about 3.2 percent of retirees doing so in 2022, according to the job placement website Indeed.


Returning to the workforce, even part-time, can pay off big for retirees. Retirees aren’t well-prepared to sustain their nest egg for a long retirement, but adding a part-time job of just 13 hours a week to the current federal minimum wage (with four weeks off per year) would earn them $6,000 a year. And that’s nothing to sneeze at: adding $6,000 in annual income is equivalent to withdrawing 4% from $150,000 in invested assets, which the retiree can protect and preserve.

Advice for pensioners

  • A financial advisor can help you find creative ways to enjoy your retirement and possibly even reduce the amount of money you take out of your nest egg each year. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three financial advisors serving your area, and you can interview your advisors at no cost to decide who is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • Use SmartAsset’s free retirement calculator to get a good first estimate of how much money you’ll need to retire.

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