I’m 65 and itching to retire but I only have $500K in savings. I want $2,000 in monthly income on top of my Social Security — how can I swing this?

Experts say most people require about 80% of what they earned pretax before retiring to maintain a similar standard of living after leaving the workforce (2). In Darren’s case, that amounts to $4,667 a month. Darren believes he can make do with less. He has no debt, isn’t a big spender, is relatively healthy and reckons the nearly $1,700 a month he’s expected to get from Social Security plus an extra $2,000 should be sufficient to retire comfortably.

The issue is where that $2,000 will come from. Using the 4% rule, a commonly applied guideline for retirement withdrawals, Darren’s $500,000 savings would provide him with about $1,667 a month. That’s not enough, so he needs to find alternatives.

Option 1: Delay retirement

If Darren is able to work longer, he should consider it. There’s a reason nearly a quarter of Americans delay retirement (3). It isn’t a popular choice. But sometimes it’s necessary to reduce nest egg requirements and save more.

Putting as much as possible from each paycheck into your retirement plan for an extra year or more can be game changing, especially if your employer offers matching contributions. In 2025, the most someone Darren’s age can add to their 401(k) is $31,000, or $77,500 if you include the employer’s contributions. Factor in returns, and it really adds up, especially if Darren also opened an individual retirement account (IRA) and maxed out contributions to that, too.

Working longer also means fatter Social Security checks. For each year that you delay retirement until turning 70, your benefits go up. If Darren held off until 66, he’d get roughly $1,850 a month from Social Security. Make that 67, and the monthly check increases to a little more than $2,000.

Option 2: Income investing

An alternative to gradually drawing down retirement savings is leaving the balance invested in income-generating assets. The beauty of this strategy is that you get paid while keeping your money fully invested. But there are also drawbacks.

For Darren to generate $2,000 a month from $500,000 invested, he’d need his savings to yield 4.8% annually — at least while his balance remains at half a million. That’s not terribly steep but may require taking a more moderate risk approach.

The safest options, such as government bonds, high-yield savings accounts and large, reliable dividend-paying companies whose goods or services are constantly in demand and likely to remain so, such as Coca-Cola and Johnson & Johnson, don’t generally pay out that kind of income. That leaves investments more susceptible to price and payout fluctuations, which isn’t ideal when you’re relying on them to keep you afloat.