How to Retire Graciously on a Low Income

The economy is in a constant state of flux, and while retiring to a tropical island may have been in the plans for many, it may not be the reality they face. What is surprising is that it is not as difficult as it appears on the surface to retire on a low income. It takes patience and planning, but if you take the time now to lay the foundation, your financial house will be in order by the time you are ready to retire.

Debt Elimination

The first concern before retiring should be to consolidate or outright eliminate your debts. In retirement you don’t want the stress of monthly payments, compound interest rates, user fees and the rest of the headaches that come with credit. Choose to consolidate all debt into one manageable payment, or put as much money against the outstanding debts as possible, paying off the little ones first. A debt free retirement is a worry free retirement.


Unfortunately, as you get older, you are at greater sick of getting sick or disabled. Life and health insurance provide protection against these situations and can supplement lost income. Other options include life insurance annuities that you pay into, and when you are at retirement age, you can draw payments against the annuity.

Asset Accumulation

If you start early enough, any investments you make for the long term are good ideas. These include guaranteed investments like bonds and cd’s, as well as stocks, mutual funds, income funds, and other investment vehicles. Understandably, if you are on a low income presently this becomes more difficult, but anything  you can scrimp and save to invest will help in the long term.

Take Stock of Your Life

Finally, take a look at your lifestyle and surroundings, and imagine where you will be when you retire. Do you need an expensive, gas guzzling vehicle, or will you be able to get by with an electric bicycle? Can you downgrade your electronics? Will you need 150 cable channels? Take a look at every area of your life and see where you would find savings that you won’t miss. If you intend to be active in your golden years, why have a huge entertainments system and home theater?

It is possible to retire graciously on a low income, it just takes planning, dedication, and the ability to let go of some of your expectations.