What does retirement look like if you haven’t saved?

The picture of retirement that many people have is a post-work period filled with travel and plenty of relaxation. It’s a time when they can finally take up a new hobby, sink into the pile of books and enjoy more time with family and friends.

The reality is that many haven’t been able to save enough money to enjoy this idealized retirement. What might their retirement look like?

They may be working for longer than expected. Many people undergo a period of “phased retirement” and either reduce their hours or start a new part-time job after retiring from a full-time schedule. Even those who don’t have a financial need may find that they value the activity and connections work brings to their lives. Without savings, continuing to work might not be a choice, but they can still look for fulfilling opportunities.

Continuing within the same profession part-time or taking on related consulting work could be the most financially rewarding route, if it’s an option. Alternatives such as customer service positions with a retailer are popular among some retirees. There are also Internet-based jobs that allow people to work from home.

Social Security could be their sole source of income. Retirees who don’t have a pension or savings and stop working may find that Social Security is their only income.

Social Security benefits depend on when a person was born, how much they’ve paid into the program, when they start to take benefits and whether or not they’re eligible for a government pension.

Once they start receiving benefits, they’ll lock in a monthly amount, although it will adjust to account for inflation. Therefore, deciding when to start taking Social Security benefits is important, as it can impact a person’s income for the rest of their life.

Claiming benefits once a person reaches their full or normal retirement age, 65 to 67 depending on when they were born, is when they’ll receive 100 percent of the monthly Social Security benefit. Taking benefits early can lock in a lower rate, while waiting can increase the monthly benefit.

In 2017, if a retiree is eligible for the maximum benefit and starts claiming at 62, they’ll receive about $2,153 per month. If they waited until they were 70 this year, they’ll receive about $3,538 per month.

The Social Security Administration’s Retirement Age Calculator is useful to see the difference in how taking Social Security early, or waiting, can affect benefits.

Depending on their income, retired people might have to downsize and make lifestyle changes. Moving to an area that has a significantly lower cost of living could mean the difference between living with financial challenges and having a comfortable retirement. Some people look for less expensive areas close to family members or even an expat community in a different country.

If they decide to stay in the same area, a smaller home can lower property taxes and maintenance costs. They can also take any profits from the sale of a larger home and pay off debts or build an investment portfolio.

Housing aside, there are many ways to downsize a lifestyle, such as selling a vehicle, shopping at secondhand stores and cutting back on monthly entertainment expenses.

One helpful part of aging is becoming eligible for all sorts of new discounts and benefits. Look online for lists of stores or organizations that offer senior discounts. Use the National Council on Aging Benefits Checkup to see which benefits are available based on your ZIP code and personal information.

The bottom line is many aging Americans don’t have enough savings to fund their lifestyle through retirement. Deciding when to take Social Security benefits and where to live are two of the most pressing questions on the horizon. No matter what people choose, they may need to supplement their income with part-time work and look for ways to significantly lower their cost of living to enjoy retirement.

Nathaniel Sillin directs Visa’s financial education programs.

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