I have $1,400 in extra retirement income each month. Is that enough for the long haul and how can I use it wisely without losing my stride?

That $1,400 in extra money monthly would provide you with an additional $16,800 annually to enjoy after paying the bills. That’s roughly a third of the entire $54,710 median household income for households of those 65 and over, as reported in September 2024 by the U.S. Census (1).

So, how should you smartly spend this "extra" money if you now have it? Here are a few possible options to consider.

Give charitably

Charitable giving is a top priority for many seniors, with 78% of pre-retirees and retirees between the ages of 50 and 80 indicating to Fidelity that they are committed to donating and expect it to play a significant role in their retirement (2).

Giving some of your extra money to causes that you care about can allow you to make a real difference in your later years. A financial advisor can also help you explore tax-efficient strategies for giving, as 21% of retirees aren't aware of any tax-advantaged methods of donating.

Open investment accounts for your kids or grandkids

Investing for your kids or grandkids is another great way to park that extra retirement money, as you can play an active role in helping the next generation get a head start on financial security.

College costs are seeing significant increases. A four-year degree in the 2035-2036 academic year could run as high as $230,176 for a four-year period (3). If you want to spare your grandkids the burden of substantial student loans, you could look into funneling some of your extra money into a 529 plan.

You could also help out your kids during their expensive child-bearing years when they may struggle to buy a house or pay for daycare costs, which average $827 per week for a nanny and $343 per week for a center, according to Care.com (4).

Diversify your portfolio

If you aren't yet retired and have plenty of money in a 401(k) or IRA, you may want to consider putting some funds into a taxable brokerage account.

Since you can't access your tax-advantaged retirement funds without penalty until you are 59½, diversifying into an investment account you can withdraw from whenever you like may be the ticket to early retirement.

Level up your lifestyle

Typically, common financial wisdom dictates that you shouldn’t succumb to lifestyle inflation (where your spending increases alongside your income). But, while this is prudent advice throughout much of your working years, if you now find yourself in a position to reap the benefits of smart financial moves or simple good luck, you could also use your extra funds to enjoy your life.

You can begin by asking yourself what would personally bring you joy? You may decide you want to travel more, spend more time on your hobbies as you aren’t forced to work into your later years or you can let yourself enjoy dining out at nicer restaurants.

Just be sure you don't go overboard, that you maintain a safe withdrawal rate, and maintain an emergency fund for any incidentals or unforeseen health expenses, even if you feel flush with cash for now.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

United States Census Bureau (1); Fidelity Charitable (2); Otium Advisory Group (3); Care.com (4)