A Comprehensive Look at Every Reliable Income Stream Available to Retirees Today
Understanding what types of income can you use in retirement to support yourself? has become one of the most important financial planning questions for Americans. As of 2025, the landscape of retirement income continues to evolve. People are living longer, healthcare costs keep rising, and economic conditions shift each year. Because of these changes, retirees increasingly depend on multiple income sources rather than relying on a single stream.
Today’s retirees commonly combine Social Security, personal savings, investment income, pensions, part-time work, and home equity tools. New data from national retirement studies shows that the most financially secure retirees use at least three different types of income, and many rely on four or more. This makes understanding every option essential for anyone planning their financial future.
The sections below break down each major income stream retirees can use, how they work in 2025, and how they fit into a complete retirement plan.
Social Security: The Cornerstone of U.S. Retirement Income
For most Americans, Social Security remains the most dependable and consistent form of retirement income. Each month, more than 50 million retirees receive payments that help cover essential living costs.
Why It Matters So Much
- Payments last for life.
- Benefits adjust annually through COLA increases.
- Income is backed by the federal government.
- Spousal and survivor benefits can supplement retirement income.
The exact benefit amount depends on your lifetime earnings and when you begin collecting. Many retirees carefully decide when to file because timing dramatically affects monthly income.
Key Social Security Timing Rules
- 62: Earliest possible age to claim, with reduced benefits.
- Full Retirement Age (66–67): Receive 100% of your earned benefit.
- Age 70: Maximum payment due to delayed retirement credits.
Retirees often use Social Security as the guaranteed “base layer” of income, covering foundational expenses like rent, utilities, and food.
401(k)s, 403(b)s, IRAs, and Roth Accounts: Flexible Savings That Convert Into Retirement Cash Flow
Tax-advantaged retirement accounts play a major role in answering what types of income can you use in retirement to support yourself? because they allow retirees to draw income at their own pace.
Traditional Retirement Accounts
These include 401(k)s, 403(b)s, and traditional IRAs. They offer tax-deferred growth, meaning you only pay taxes when you withdraw funds later in life.
Key features:
- Withdrawals are typically taxable as ordinary income.
- Required Minimum Distributions begin at age 73.
- You can choose systematic withdrawal amounts.
Roth Accounts
Roth IRAs and Roth 401(k)s provide tax-free income in retirement once eligibility requirements are met.
Benefits include:
- No taxes on qualified withdrawals.
- No required minimum distributions for Roth IRAs.
- Flexibility to withdraw income during high-expense years.
Many retirees combine Roth and traditional withdrawals to control their yearly tax burden.
Pensions and Employer-Sponsored Guaranteed Income
Although fewer jobs offer pensions today, many current retirees and public-sector workers still receive them. Pensions provide a lifetime monthly benefit based on your salary, age, and years of service.
What Pensions Offer Retirees
- Predictable monthly checks
- Lifetime coverage
- Potential survivor benefits
Some retirees without pensions use private annuities as a substitute for guaranteed income.
Annuities: Creating Your Own Lifetime Paycheck
Annuities allow retirees to convert savings into guaranteed monthly income. They are especially useful for people concerned about outliving their money.
Types of Annuities Common in Retirement
- Immediate income annuities: Begin paying monthly income right away.
- Deferred income annuities: Payments begin later, often around age 70–80.
- Fixed annuities: Provide stable, predictable payments.
- Variable or indexed annuities: Offer potential growth with varying risk levels.
Annuities can act as a steady supplement to Social Security, helping retirees cover fixed monthly bills.
Dividend and Interest Income From Investments
Interest rates in recent years have made bond and savings yields more attractive than they were a decade ago, giving retirees additional income opportunities.
Investment Income Sources Include
- Stock market dividends
- Bond interest
- CD interest
- Treasury securities
- High-yield savings income
Investment income is not guaranteed, but when managed carefully, it can provide ongoing cash flow while preserving principal.
Rental Income and Real Estate Cash Flow
For retirees with real estate assets, rental properties can provide strong monthly income—sometimes exceeding what retirees receive from investment accounts.
Ways Retirees Use Real Estate for Income
- Renting out a home or condo
- Leasing a basement apartment or ADU
- Short-term rentals
- Investing in REITs
The main advantage is steady income. The main challenge is property management, which can be time-consuming and unpredictable. Some retirees outsource management or switch to hands-off real estate investments.
Part-Time Work: A Practical and Increasingly Popular Income Source
Many retirees supplement their income through part-time or seasonal work. Surveys show nearly a third of Americans continue earning wages after they retire—either out of necessity or for enjoyment.
Why Retirees Choose to Work Part-Time
- Helps reduce withdrawals from savings
- Delays claiming Social Security or allows for higher future benefits
- Provides social interaction and structure
- Offers mental stimulation and purpose
Popular options include consulting, tutoring, gig work, caregiving, seasonal retail jobs, and creative entrepreneurial projects.
Home Equity: A Powerful but Underused Retirement Resource
For many U.S. families, the home is their largest financial asset. While home equity is not income by itself, it can generate income-like cash flow using several methods.
Popular Home Equity Strategies
- Downsize to a smaller home to free up cash
- Sell and rent to reduce expenses
- Tap a reverse mortgage beginning at age 62
- Use home equity lines for emergency liquidity
Reverse mortgages have become more common among older adults who want to stay in their homes while accessing additional funds.
Health Savings Accounts (HSAs) as a Retirement Tool
If you contributed to an HSA during your working years, those funds become extremely valuable in retirement. Medical expenses are among the highest costs retirees face, and HSAs offer unmatched tax benefits.
HSA Benefits for Retirees
- Tax-free withdrawals for medical expenses
- Can be used for dental, vision, prescriptions, and Medicare costs
- Funds roll over indefinitely
- After age 65, non-medical withdrawals are allowed (with taxes applied)
This gives retirees a separate bucket of money specifically for healthcare.
Other Supplemental Income Sources
There are a few additional income categories, though they are less common:
- Cash-value life insurance withdrawals
- Family financial gifts
- Inheritances
- Royalty income
- Income from creative work or small hobbies
While these are not primary sources, they can fill specific financial gaps.
Side-by-Side Comparison of Retirement Income Types
| Income Source | Reliability | Tax Treatment | Best For |
|---|---|---|---|
| Social Security | Very High | Partially taxable | Essential expenses |
| 401(k)/Traditional IRA | Medium | Taxable | Flexible withdrawals |
| Roth IRA | High | Tax-free | Reducing tax burdens |
| Pensions | Very High | Usually taxable | Lifetime stability |
| Annuities | High | Varies | Guaranteed income |
| Investments | Medium | Mixed | Supplementing income |
| Rental Properties | Medium | Taxed | Cash flow and equity |
| Part-Time Work | Variable | Taxable | Lifestyle support |
| Home Equity | Medium | Depends on method | Long-term backup |
| HSAs | High | Tax-free (medical) | Healthcare costs |
This comparison shows why most retirees use a combination of income types rather than relying on a single stream.
Building a Strong, Multi-Layered Retirement Income Plan
Knowing what types of income can you use in retirement to support yourself? helps create a strategy that balances guaranteed income with flexible resources. The most secure retirement plans combine:
- Social Security
- Pensions or annuities
- Savings and investment withdrawals
- Part-time work if desired
- Real estate or home equity tools
- Tax-smart planning with Roth and HSA accounts
A diverse income mix offers protection against inflation, market downturns, healthcare surprises, and long-term financial uncertainty.
If you’re shaping your retirement plan, share which income sources you’re considering—your insight may help others preparing for the years ahead.