Retiring at 65 With Zero Savings: Yes, It’s Possible (But It Won’t Be Easy)

The No-Savings Retirement Reality Check

Let’s face it – if you’re staring down retirement age with an empty savings account, you’re probably feeling pretty anxious right now. And you’re not alone. According to Thrivent’s Retirement Readiness Survey nearly 44% of near-retirees have done minimal to no retirement planning. That’s almost half of soon-to-be retirees who might be in the same boat as you.

I get it. Life throws curveballs. Maybe you had medical bills that drained your accounts. Perhaps you helped put kids through college. Or maybe saving for retirement never seemed important because it was so far away. No matter what your reason is, the question now is: Can you retire at age 65 without any money saved?

The short answer is yes – but it’s gonna require some creativity, flexibility, and honest planning.

Your Social Security Lifeline

For most folks with no savings, Social Security becomes the primary (or only) source of income Here’s what you need to know

• The average Social Security benefit in late 2023 was about $1,710 per month (around $22,000 annually)
• Social Security typically replaces only about 30% of your previous earnings
• You can claim as early as age 62, but your benefits will be reduced
• Waiting until your full retirement age (66-67 depending on birth year) gives you 100% of your benefit
• Delaying until 70 increases your benefit by 8% for each year you wait after full retirement age

The timing of when you claim Social Security becomes super critical when you don’t have savings. Waiting longer means bigger monthly checks, which could make a huge difference in your financial stability.

Before you decide what to do, use the Social Security Administration’s calculators to get an idea of how much money you will get. Knowing how much money you can expect to make helps you plan the rest of your strategy.

Create a Bare-Bones Budget (and Stick to It)

When retiring with zero savings, your budget becomes your best friend. Seriously. You need to know exactly what’s coming in and what’s going out.

First, calculate your essential expenses:

• Housing (rent/mortgage, property taxes, insurance)
• Utilities
• Food
• Healthcare costs (Medicare premiums, supplemental insurance, out-of-pocket expenses)
• Transportation
• Debt payments

Then compare this to how much you expect to get from Social Security. This exercise might be uncomfortable, but it’s necessary. Misty Garza, CFP, VP at Bogart Wealth, says, “It might be painful, but you need to know exactly what your essential living expenses are because most likely you are going to have to cut out any discretionary spending.” “.

If there’s a gap between your expenses and income (which is likely), you’ll need to find ways to close it.

Housing: Your Biggest Retirement Asset

If you own your home, congratulations! You’re sitting on what might be your most valuable retirement asset. Here are some options:

Downsize

Selling your home and moving to something smaller or less expensive could free up cash to support your retirement. You might be able to buy a smaller place outright and put the difference into savings.

Take in a Boarder

It sounds old-fashioned, but renting out a spare room can provide steady monthly income. Just be sure to check local regulations and screen potential tenants carefully.

Reverse Mortgage

With this choice, you can use the value of your home while still living there. You don’t have to pay back the loan until you move out, sell the house, or die.

As Lisa Whitley, an accredited financial counselor, points out: “If the retiree is house-rich but cash-poor, this is the scenario that reverse mortgages were designed for.” However, these can be complex, so read the fine print carefully and understand that this may impact what you can leave to heirs.

Relocate to a Lower-Cost Area

Moving to an area with a lower cost of living can stretch your limited income much further. This might mean moving to a different state or even exploring affordable retirement destinations abroad.

The Semi-Retirement Strategy

Who says retirement has to be all-or-nothing? Many people find that semi-retirement is a better solution when savings are lacking.

Consider:

• Part-time work in your current field
• Consulting based on your career expertise
• Retail or service jobs (which often hire older workers)
• Gig economy opportunities (driving, delivery, pet sitting, etc.)

Even earning $500-1,000 a month can dramatically improve your financial situation. Plus, as Pawan Jain, CFA, CFP and associate professor at Virginia Commonwealth University notes, part-time work provides “social interaction” benefits beyond just the paycheck.

Tap Into Programs for Seniors

There are numerous support programs designed specifically to help older adults with limited income:

• Supplemental Security Income (SSI) – Provides additional income if you qualify based on financial need
• Medicaid – Can help with healthcare costs if you meet income requirements
• SNAP (food stamps) – Assistance with grocery expenses
• LIHEAP – Help with energy bills
• Senior housing programs – Subsidized housing options
• Meals on Wheels – Food delivery services, sometimes free depending on your situation
• Senior centers – Often provide free or low-cost meals and activities

Don’t be too proud to use these programs – they exist specifically to help people in your situation. Call 211 to connect with essential community services in your area.

Healthcare: The Retirement Budget Buster

Healthcare costs can quickly derail any retirement plan, especially one with no savings buffer. At 65, you’ll qualify for Medicare, but that doesn’t mean all your healthcare is free. You’ll still have:

• Medicare Part B premiums ($174.70/month in 2024 for most people)
• Medicare Part D (prescription drug coverage)
• Potential supplemental insurance (Medigap) costs
• Copays and out-of-pocket expenses
• Long-term care needs (not covered by Medicare)

Look into whether you qualify for Medicare Savings Programs, which can help cover premiums and other costs. Also explore whether you’re eligible for Extra Help with prescription drug costs.

What If It’s Just Not Enough?

If after doing all this math, you still can’t make ends meet, don’t panic. You have a few more options:

Family Support

Many families help support elderly parents or relatives. This might mean moving in with adult children or receiving financial assistance from family members. Have open, honest conversations about what help might be available.

Delaying Retirement

Working a few more years can make a huge difference. Each additional year of work:

• Gives you more current income
• Increases your future Social Security benefit
• Reduces the number of years you’ll need to support yourself in retirement
• Potentially provides health insurance before Medicare eligibility

Community and Religious Organizations

As Garza mentions, “Some religious organizations have a benevolence committee that can help individuals who are in poverty or facing financial distress.” Your church, synagogue, mosque or other community organization might have resources to assist.

Starting Late: It’s Better Than Never Starting

Even if retirement is just a few years away, starting to save now is better than not saving at all. Here’s what you can do:

• Maximize catch-up contributions – For 2025, if you’re 50+, you can contribute an extra $7,500 to a 401(k) beyond the regular $23,500 limit, and an extra $1,000 to an IRA beyond the regular $7,000 limit
• Take full advantage of employer matches – This is literally free money!
• Consider safe investments – CDs, bonds, or annuities might provide some income with lower risk than stocks
• Explore working longer – Even a few extra years of saving can make a significant difference

Real Talk: It Won’t Be the Retirement of Your Dreams

I’m not gonna sugarcoat it – retiring at 65 with zero savings will mean making significant sacrifices. You won’t be taking luxury cruises or buying a vacation home. You’ll likely need to carefully monitor every dollar and may need to rely on government assistance programs.

But that doesn’t mean you can’t have a fulfilling retirement. Many retirees find joy in:

• Volunteering
• Spending time with family
• Pursuing low-cost hobbies
• Being active in their communities
• Enjoying simple pleasures

Your Action Plan Starting Today

If you’re facing retirement with no savings, here’s what to do right now:

1. Get a clear picture of your Social Security benefits – Create an account at ssa.gov to see your expected benefit amount
2. Create a detailed budget of current and expected retirement expenses
3. Evaluate your housing situation and consider whether downsizing or a reverse mortgage makes sense
4. Research support programs you might qualify for
5. Consider semi-retirement options that could supplement your income
6. Start saving something, anything – even small amounts add up
7. Talk to a financial professional – Many offer free consultations or look for non-profit financial counseling services

Final Thoughts

Retiring at 65 with no savings isn’t ideal, but it’s not impossible. With careful planning, lifestyle adjustments, and making the most of available resources, you can create a sustainable retirement plan.

Remember what Terri Fiedler, president of retirement services at Corebridge Financial, says: “Nothing is impossible. However, with very little saved, it will likely be much harder to live the life you envisioned in your retirement years.”

The key is to be realistic, flexible, and proactive. Start planning now, even if retirement is just around the corner. Your future self will thank you for every step you take today.

Have you started planning for your retirement with limited savings? What strategies are you considering? I’d love to hear your thoughts and questions in the comments below!