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How to retire without social security; retiring without a pension.

Updated on June 19, 2016
TessSchlesinger profile image

Growing up in a political family, Tessa joined her first political party at 14. Her interest in progressive politics & economics continues.

Resources vs Money

Most first world countries provide a very small pension, some form of welfare, or social security. It might not be enough to live on though, so this is where free resources come into play. There have been quite a few individuals who have proven that it's possible to live without money. They do this by acquiring resources rather than income.

While it might not be possible to retire with no resources, it's possible to live on very little money if one has resources. The trick is to increase the number of resources so that less money is required. For instance, some might have managed to pay off their home so this is a resource. Shelter is taken care of. A flourishing vegetable garden is another resource. Add a chicken coop and eggs provide some necessary protein. If you live in a city where travel for seniors or pensioners is free on public transport, that is yet another resource. The greater the number of resources, the less money is required. So if you need (or want to) retire, and you don't have any money, or you have very little money, start focusing on acquiring resources.

Resources instead of money!

Instead, her small shop was assaulted by many of the city’s unemployed and retired folk eager to trade their skills and old stuff for something they needed.
Instead, her small shop was assaulted by many of the city’s unemployed and retired folk eager to trade their skills and old stuff for something they needed. | Source

USA Social Security details. What you can expect.

Thirty six percent of Americans have nothing saved for retirement. These Americans only have their current income, plus any money they paid into Social Security during their working years. If they only ever earned minimum wage, this is very little to look forward to.

In order to qualify for retirement in the USA, you have to be 65 years old if you were born before 1938 and 67 years old if you were born in 1938 or later.For the exact age you need to be in order to retire in the USA, click here. You also have to have paid in 40 credits (payroll taxes) during that time. As you cannot pay in more than four credits per year, this means you would have to work for ten years with a minimum income of $4000 per year. You can also retire earlier - from the age of 62 - if you are prepared to take a 30% reduction. You can find details of amounts paid on the government website.

The minimum pension for someone who didn't put aside a large amount for later years is something like $900 per month (topped up with a social welfare payment). However, in order to qualify for the minimum, you have to have paid in for a total of eleven years. If you worked less than those eleven years, your monthly social security payment could be as little as $50 per month.

If you delay retirement, there is an increase in the amount you receive - ranging from 5.5% to 8%. However, statistics show that the earlier people retire, they longer they live. Working in the modern world is stressful. There are also studies which show that retired people are happy people. So rather than work extra years, find extra resources.


How to retire without money

Cheap or free accommodation in the USA

Outside of medical expenses, the biggest cost is accommodation. If you haven't fully paid off your house, there is the monthly mortgage (often more than the income coming in), or the monthly rent. In the latter case, there are apartment blocks which are specifically allocated for retirees. These have a lower rent than those for commercial purposes, and depending on the state, will have a portion paid for by government. Different Housing Authorities provide different levels of assistance.

If you haven't paid off your home, depending on how much more you have to pay, you may chose to continue to work until you have paid in full. However, if this is more than a year, it's probably not worth it in terms of healthy issues incurred through extra stress. A consideration would be to tell the home and buy something less expensive.

I am not a great believer in investing money though I have invested (in South Africa) in bridging finance which pays 13.5% and is non-risk. The way I see it is this. If you are living in America and you are only getting 1% or 2% on your $40,000 investment, it will give you between $400 and $800 per year. Hardly worth it. Better to have an extra room in your home and rent it to someone for $800 a month.

Intentional communes and/or co-housing are also options. Sharing accommodation and living as a community lowers costs substantially plus provides a community to help in case of trouble (and keep you company.) Abbeyfield in the UK and South Africa buy homes with large numbers of bedrooms and then rents out the rooms to individual seniors who do not have sufficient income. Kitchen and bathrooms are shared, as are a few tasks around the home.

Geographically, rent and house prices are cheaper in some areas than others. While I would normally not advocate leaving one's community where one has made life long friends, in some circumstances, relocating is the best idea. My own pension was insufficient in both Europe and America, so I relocated back to South Africa where it buys a lot more! Retiring in various South American countries can provide an increased standard of living, and if you have a minimum of $500 per month, you would qualify for immigration to some countries.

Another option would be tiny homes! The great thing about these fully equipped homes is that you can put them on land where you don't have to pay rent for the land. They are too small to qualify. Each state, though, has different zoning requirements.

This 196-square-foot house near Boise, Idaho, is home to Macy Miller, her partner James, their daughter Hazel, and their Great Dane, Denver T.
This 196-square-foot house near Boise, Idaho, is home to Macy Miller, her partner James, their daughter Hazel, and their Great Dane, Denver T. | Source

Pension details in the United Kingdom

Pension options are easier in the UK than in the US. That is because there are a broader range of social services. They are, however, as with the States, also under threat as the 1% in both countries prefer to use the contributions made by workers for other purposes. Currently, the pensionable age in the UK is rising with each year. While once it was 60, it is working its way towards 73. Click here for pension age tables. You can also calculate your pensionable age here.

You need to have worked in the UK for 30 years to receive full pension. The full state pension is £113 per week but this can be topped up to £148 if you have no other income from other investments. This is called a pension credit and needs to be applied for.

If you have not worked in the UK for the full 30 years, you still get a portion of your pension - about £17 for every five years. You can then apply for pension credit, and depending on your costs and situation, will receive a maximum of £148 per week.

Should you wish to live outside the UK (in sunnier climates), a pension credit will not be paid to top up your pension if it is below £113 per week. Nor will the housing authorities pay your rent.

If you've recently returned to the United Kingdom, you will need to prove residency before qualifying for a pension. - even if you have paid pension.

Affordable housing for pensioners in the UK

Should you not have enough money to cover rent, you can apply for housing assistance. The authorities will pay your full rent/mortgage is you cannot afford to pay for it, regardless of the cost of the rent. However, a deduction will be made for every room that is additional to the one bedroom you require. You might also qualify for council housing if you are without suitable accommodation, but there is a waiting list.

You also have other options! Abbeyfield provides decent, clean, and safe homes at minimal rent. You can live in any city and apply for your own small flat. People over 55 can apply. You can buy, rent, or lease, plus chose options for assisted living or independent living.

You can also relocate and receive your pension in Europe or elsewhere. Countries like Spain, Portugal, and Croatia can provide rental accommodation for substantially cheaper than the UK can. I had a room in a small village in Spain for EU100 per month.

If you have a crowd of close friends or know of other who would be happy to co-house with you or set up an intentional community, these have great benefits outside of less expensive rent. The benefits include a support system plus friends with whom you can share those happy times.

Portugal offers outstanding home prices and cheapest rentals in Europe

Medicaid and Medicare, student medical options - USA

In all first world countries, with the exception of the USA, medical services are available to everybody either without cost or very inexpensively through a reasonably priced insurance system. In the USA, there is some effort to provide for those who have not been able to afford basic health care - if they have an income that can meet a small insurance payment. If they cannot meet a payment, they tend to be without medical care. Texas is the worst case for this. The New England states the best. California falls somewhere between the two. You might consider relocating to a state that provides for you medicinally.

Medicare also kicks in once one has retired, often providing free care to those who can't afford it. Medicare is strictly for those who have paid sufficient credits to have a retirement income.. However, if you have not paid sufficient credits and, therefore, do not qualify for medicare, medicaid will cover you.

Should you immigrate to another country, you might need to pay for your own medical treatments. The upside of this is that the cost of any medical service is not even close to what treatment costs in the States. For instance, in Mexico, the same standard of service by men and women educated at top universities in the USA (Harvard, Standford, etc.) costs anything from 10% to 30% of costs in the USA.

Also consider universities. Dental and doctorate schooling need patients on which to practice, and under the oversight of professors provide good care at inexpensive prices.

When there's no retirement fund or no pension - jobs, passive income, and more.

Sometimes you can be caught between a rock and a hard place, and sometimes that means continuing to work. The difference is that if you have figured out how to get as many free resources as possible, your income will need to be substantially less. This means you can work on your own terms.

This can include working once or twice a week providing a specialist service, generating a passive income through some sort of business store on the web, joining up with friends to capitalize a small business importing through Alibaba, and more. Also don't rule out working for services or goods.

I have reached a point in my life where when all else fails, go out and beg. When the system doesn't support you, in order to live, you have to do what you have to do!

...they’ve no pension, are nervous about not having a secure income and feel a certain pressure to support their kids.
...they’ve no pension, are nervous about not having a secure income and feel a certain pressure to support their kids. | Source

Minimalism: What you really need to retire!

If you're going to retire without money, then you need to be able to live frugally. In order to do that, you need to calculate the least you will need, the most you will need, and then aim at the medium figure. We all believe that we need much more than we do in order to be happy. It doesn't harm us to become comfortable with minimalism.

As a retiree/pensioner, my needs are fully met by having my own room, sharing a home with other pensioners. My needs are simple - food, laptop, cell phone, a small income, some clothes, a bed to sleep on, a cupboard to put my clothes, a shared kitchen, bathroom, living room, and garden, adequate, inexpensive public transport, and the ability to receive free medical treatment. I have a library close by, and as a pensioner in South Africa, I can swim free at public swimming pools. I happen to love swimming so this works for me. As a pensioner in Scotland, I could travel throughout the country on buses free, and in the San Diego (California), I received a much reduced monthly ($14 per month) bus pass which enabled me to travel wherever I wanted to.

So take a long hard look at what you really need. That way you can establish how to provide those things for yourself.

Getting away from old mindsets - learning to live with less...

Alternative lifestyles for seniors / pensioners

Two can live as cheaply as one, and six as live as cheaply as three.Again, it's much cheaper to club together with others to share a house, resources, and different facilities than for each to pay for them individually. By the same token, consciously taking a leaf out of the intentional community lifestyle is also a consideration.

If you are set on finding compatible people in order to form your own mini retirement community, here's a good way of doing it.

  1. Find out what everybody can contribute both financially and in terms of skill sets. Someone who is a nurse will be highly sought after as a result of their skills. Another might be an excellent cook with knowledge of healthy meals on the cheap. Still another might be a great handyman. These are all skills which will save the community money in the long run. So choose who you want in your community.
  2. Figure out how much capital you will need to buy a house with enough rooms to house you all. Some might not have as much money as others, but might bring along a much desired skill. Imagine having your very own doctor living on the premises. Weigh things carefully!
  3. Ideally, you should buy the house for a cash sum so that rent does not have to be considered. Alternatively, if there is a mortgage, someone who contributed to the purchase of the house might pay considerably less rent than someone who did not contribute.
  4. Decide on which area is suitable, if all cars are going to be retained or whether only one or two will be retained. The community will contribute to the upkeep.
  5. Take care to think about all needs - emotional, physical, entertainment, etc. Factor those in. If the total income of the house is not able to provide a swimming pool or a tennis court (luxuries), make sure that there is a living room where board games, TV, or a music system for dancing can be provided. Exercise is important.
  6. Get an attorney to work things out so that there are no misunderstandings.
  7. Provide an 'out' for someone who does not wish to be part of the community anymore, but who paid half the cost of the house. These kind of factors must all be sorted out ahead of time.
  8. Grow a garden so that there is a cheap and healthy source of food.
  9. Everybody will have friends and families over at some point. Make sure that there is a guest room available. Work out a timetable so that there is no unpleasantness. Some compromises will need to be made as most people will want to be with family over holidays like Christmas and New Year.

Alternative lifestyles are not for everybody, but all options need to be considered if one has very little in terms of resources. A shared house is better than being homeless because one cannot afford the rent on a minimal income.


One in five is forced to survive on an income of less than £750 a month, equal to around £25 a day.
One in five is forced to survive on an income of less than £750 a month, equal to around £25 a day. | Source

Selling what you don't want or need for cash.

You'll be amazed how lighthearted you will feel when you realize how little you need to live well and be happy. Retirement is an outstanding opportunity to learn what minimalism is all about, and once you do that, you will understand why you need a lot less money than you thought you did. It also enables you to convert your extra possessions to cash, thereby increasing your nest egg for your retirement years.

Take a look around your house and see what you use every day and which you seldom use. Put aside all the things you don't use in the garage or in another room, then see if you miss them in the next three or four months. If you don't, it's safe to say that you will probably never use them. Sell them, then put that money towards your capital for your pension years.

You may well think, "But I might need it one day." Yes, you may (but probably not). If you do, that's what a community is for. There are many organisations and communities who will provide what you need for a short period of time. :)

Use this money wisely. If it's not large enough to do anything specific, put it away until you've added to it. Use it for things like setting up a small business that generates passive income (not network marketing), contributing towards the purchase of a house if you join up with several others, or investing in a food producing garden.

Happy retirement years...

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Being older can be the best years of your life!

Retiring without money is about minimalism, resources, and community.

The ethos behind retiring without money is focusing on resources rather than money and getting together with others. It is a difficult position to be in, and most solutions will speak about investing money in various funds in order to live off the interest. However, 80% of Americans do not have sufficient capital saved for that to happen. So it's silly advice to advise people where to invest when they have nothing or little to invest. It's best to look at the situation creatively, find people in similar situations, put your heads together, and learn to live with less. After all, it's on record that minimalists are happy people! :)

© 2014 Tessa Schlesinger

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    • Linda Courtney profile image

      Linda Courtney 2 months ago from Bensalem, PA

      Interesting article. I've been thinking a lot lately about how I'll survive when I retire as I don't have much saved. Living with others is one thing I would definitely consider. I'm already starting my journey to minimalism by downsizing and selling stuff I don't need.