Too Broke to Retire? Let’s Fix That...Before It’s Too Late

If you’re in your 50s or 60s and don’t have much or anything saved for retirement, you’re not alone. You’re also not doomed. But you are running out of time to sit around hoping something magically changes.

Most people in this age group aren’t sleeping well because, deep down, they know they can’t work forever. Maybe you’ve told yourself, “I’ll just keep working until I die.” But life doesn’t always cooperate like that.

What happens if your back gives out? What if you have a stroke? What if your company downsizes and your job goes with it? Or maybe one day you just wake up and realize you can’t stand the thought of doing one more shift, one more client call or one more day with a boss breathing down your neck. It may not feel like any of those things may happen, until one day…

That’s when it hits you that don’t have a safety net.

But here’s the good news, you still have time to build one. You just need a different kind of plan.

1. The Harsh Reality Nobody Talks About

According to the 2024 Prudential Financial “Pulse of the American Retiree” survey, Americans around age 55 have median retirement savings under $50,000. Another study found that 20% of older Americans have no retirement savings at all (SML Financial).

The system was built for a different time when people worked 30 years for one employer, got a pension and retired at 65. That world doesn’t exist anymore.

So, what do most people do? They either ignore the problem or hope Social Security will bail them out. But Social Security was never meant to fully replace your income. The average benefit only replaces about 37% of pre-retirement earnings for the typical worker. It’s a supplement, not a strategy.

If you’re forced into early retirement because of health issues, layoffs or burnout, that check alone probably won’t cover your basic costs of living.

You may not be able to afford many things in life but the biggest thing you can’t afford is to wait. The good news is, you can still build wealth faster than you think if you shift your mindset from saving money to creating income.

2. Rethinking Retirement: Build Income, Not Just Savings

Forget the old idea of “saving for retirement.” That ship has sailed for most people. The new game is income creation. Building systems, skills and small assets that make money even when you’re not working.

This is your next five years, not ten. Five years to build something that starts paying you back.

Here’s what that looks like in real life:

• Monetize what you already know.
  Can you teach, fix, design or coach? Turn that into a micro-business or consulting service. Platforms like YouTube, Teachable, and Substack let you package your experience and get paid for it.

• Find leverage, not labor.
  Stop trading hours for dollars. Build or join systems that let others sell for you or products that sell while you sleep.

• Create digital assets.
  A blog, a YouTube channel, a course, or even a newsletter can all become income streams that don’t depend on your daily grind. You’re not looking for another job; you’re building a machine that makes money while you live your life. Using Canva create digital products that you can use as guides, e-books or presentations to teach what you know. These types of products can be purchased by anyone, anytime of day. You can find out more about creating digital products for money at one of my previous posts titled, “Turn Your Skills Into a Digital Product and Create Scalable Income” at this web address, https://muscleforthemind.com/turn-your-skills-into-a-digital-product-and-create-scalable-income.

3. Creative and Outside-the-Box Ways to Make Money

Let’s talk about the unorthodox stuff, The things people might whisper about but don’t usually say out loud. Because let’s face it, traditional jobs aren’t what they used to be.

• The Legal “Pyramid” — Affiliate or Tiered Income

Affiliate marketing lets you earn commissions for recommending products or services you believe in. Some programs even pay recurring income from subscriptions or memberships you refer.
It’s the modern version of sales management without payroll or inventory. You help people find what they need and get rewarded for connecting the dots.

• Day Trading and Investing

Is there money in it? Yes. Is it risky? Absolutely.
Short-term trading can generate income if approached like a disciplined business, not a gamble. According to Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC), most day traders lose money but those who study market behavior, manage risk and by starting small can build skill over time. The key is education and emotional control, not luck.

• Content Subscription Platforms

Platforms like OnlyFans or Patreon allow creators to share private, paid content directly with subscribers. It’s not all adult content. Many creators use pseudonyms or alternate branding to keep their personal lives private while monetizing expertise in areas like fitness, cooking or coaching. Subscribers pay monthly fees for exclusive access, giving you recurring income without relying on ads.

• Flipping and Licensing

You can buy, improve and resell nearly anything not just cars or furniture, but websites, digital designs and online courses.
Licensing your content or photography can also generate royalties, meaning someone else pays to use what you’ve already created.

• Micro-Investing and Lending

Peer-to-peer lending, dividend stocks or REITs (Real Estate Investment Trusts) can all provide income without requiring full-time effort.
Start small, reinvest your returns and build over time. The hardest part is resisting the urge to spend it because reinvesting is where real growth happens.

You can learn more and find out about dividends, the importance of reinvesting them and which companies have a long track record of paying out dividends from a previous blog post of mine here, https://muscleforthemind.com/turn-side-hustle-money-into-wealth-beginner-investing-apps-that-work-even-when-youre-not-working or go to muscleforthemind.com and go to the Blog page.

4. Navigating Social Security and the Income Trap

If you start collecting Social Security before full retirement age, the IRS limits how much earned income you can make before part of your benefit is withheld.

But here’s what most people don’t realize, not all income is earned income. According to the Social Security Administration (SSA), the earnings test only counts wages and net self-employment income. If you have, investment income, dividends, interest and most rental income they don’t count toward the earnings limit for benefit reduction.
However, rental income can count if it’s part of an active real estate business (SSA Handbook).

That means if you build income streams that don’t depend on wages or a paycheck, you can collect Social Security and keep earning, legally and strategically.

• How the IRS and SSA Define “Earned Income”

For Social Security purposes (specifically, before reaching Full Retirement Age), the Earnings Test applies only to earned income.

Earned income includes:

• Wages from employment

• Net earnings from self-employment (after expenses)

• Bonuses, commissions, or payments tied directly to your labor

If you earn above the SSA earnings limit ($22,320 in 2024, which is adjusted annually), Social Security may withhold part of your benefits, typically $1 for every $2 you earn over the limit.

• What Is Not Earned Income

The following don’t count toward that earnings limit:

• Dividends and interest from investments

• Capital gains (e.g., selling stocks or property)

• Rental income (in most passive cases)

• Pension or retirement distributions

• Royalties and some licensing income (depending on activity level)

These are considered unearned income. They don’t come from active labor.

• So Where Do Blogs, Podcasts, and YouTube Channels Fit?

This is where nuance comes in. It depends on how active you are and how the income is structured.

If you’re actively creating, managing, or promoting:

Then the IRS and SSA would likely view your income as “self-employment income”, meaning it’s earned income.
Examples:

• Running a blog and selling ads, affiliate links or your own products

• Hosting a podcast and getting paid sponsors

• Managing a YouTube channel with regular uploads and monetization

In these cases, you’re providing an ongoing service and doing active work that’s considered earned income and would count toward the SSA earnings test before full retirement age.

If you set it up to run passively:

However, if you’ve already built the content, automated the systems and only receive royalties or residual income, that’s often treated as unearned income, similar to a book author earning royalties on previously published work.

Examples of passive, unearned online income:

• Royalties from eBooks or online courses you created long ago

• Affiliate commissions from evergreen blog posts that you no longer manage daily

• YouTube ad revenue from older videos still generating views while you’re mostly inactive

In those cases, if the activity is minimal or fully automated, SSA may treat the income as passive not subject to the earnings limit.

But:
If you’re still maintaining the site, editing videos, responding to clients or creating new content, it leans back toward earned income.

Strategic Takeaway

For semi-retirement planning, the sweet spot is building semi-passive or fully passive income streams before you start drawing Social Security.

That could mean:

• Building blogs, podcasts or YouTube channels that run on old content and automation

• Creating digital products or affiliate systems that continue earning with minimal work

• Investing in dividend-paying assets, royalties or small business partnerships where you’re not materially involved

What "Dividend-Paying Assets" Actually Are

These are investments that pay you regular cash distributions (usually quarterly) simply for owning them.

You don’t have to do any work.
You don’t manage anything.
You don’t “participate” in the business.

You’re simply an investor and therefore the money you receive is unearned income.

This keeps your Social Security safe.

• The 5 Main Types of Dividend-Paying Assets

1. Dividend Stocks

These are shares of companies that pay part of their profits back to shareholders.

Examples of dividend-paying companies:

• Johnson & Johnson

• Coca-Cola

• Procter & Gamble

• McDonald's

• Verizon

These are often stable, long-running companies with consistent dividend payments.

You buy the stock → they pay you dividends → unearned income.

2. Dividend ETFs (Exchange-Traded Funds)

These funds hold dozens or hundreds of dividend-paying companies.
Far less risk, far more diversification.

Below are some examples of popular dividend ETFs:

• VYM – Vanguard High Dividend Yield ETF

• SCHD – Schwab U.S. Dividend Equity ETF

• HDV – iShares Core High Dividend ETF

• DVY – iShares Select Dividend ETF

People tend to like these because:

• They grow steadily

• They pay dividends every quarter

• They require no skill, time or involvement

These are some of the simplest ways to build passive income.

3. REITs (Real Estate Investment Trusts)

This is real estate investing without being a landlord.

REITs are companies that own or finance income-producing properties such as, apartments, storage facilities, office buildings, data centers, etc.

Examples:

• O – Realty Income (“The Monthly Dividend Company”)

• VNQ – Vanguard Real Estate ETF

• PLD – Prologis

REITs are legally required to pay out at least 90% of their taxable income to investors.
That means:

• Higher dividends

• Still 100% passive

• No tenant calls at midnight

4. Preferred Stocks

These are a blend between stocks and bonds.

Companies often issue preferred shares when they want to raise money without giving up control.

Features:

• Higher dividend yield

• Regular payments

• Lower price volatility than regular stocks

Still completely passive.

5. Bonds and Bond Funds

These don’t pay dividends; they pay interest.
But the idea is the same:
You receive regular passive income.

Examples:

• Treasury bonds

• Corporate bonds

• Municipal bonds

• Bond ETFs like BND or AGG

Interest payments do not count as earned income.

• Why These Are Good for Social Security Planning

Because all of the income they produce is:

• Passive

• Not tied to your labor

• Not “earned” under SSA rules

So:

• Your Social Security benefits are untouched

• Your income increases

• Your taxes are typically lower

• Your time commitment is zero

It’s the cleanest, safest way to stack unearned income in your 50s and 60s.

Example: How This Works in Real Life

Say you build a portfolio of:

• $50,000 in SCHD (dividend ETF)

• $30,000 in VNQ (real estate ETF)

• $20,000 in bonds

Total: $100,000 invested.

If the blended yield is around 4%, you earn about:

• $4,000 per year

• $333 per month

Without working.

Multiply that portfolio over years:

• $200K = $666/month

• $300K = $1,000/month

• $500K = $1,666/month

All unearned.
All SSA-safe.
All passive.

That way, by the time you claim Social Security, your “earned” workload and therefore your taxable earned income is minimal, even though your total income is strong.

That’s why your 50s and early 60s are the best time to set these systems up. Once they’re running, you can ease into semi-retirement with flexibility instead of fear.

5. The Real Goal: Control, Not Just Comfort

Retirement isn’t about quitting work it’s about choosing how and when you work.
Freedom doesn’t come from a big account balance; it comes from knowing you’ve built income that keeps flowing whether you’re working, traveling or resting.

That’s what this next phase of your life should be about: control, not survival.

Your 1–5 Year Freedom Plan

If you take one thing from this, make it this: you cannot afford to wait.
Every month you delay is another month you could’ve been compounding your freedom.

Start building your 1–5 Year Freedom Plan:

1. Identify your skills and test one digital or side-income idea.

2. Drop what doesn’t work. Double down on what does.

3. Build leverage and bring others in, automate or scale.

4. Diversify and add a second stream of income or investment.

5. Shift into freedom mode — live off the systems you built.

Because at the end of the day, it’s not about how late you started; it’s about how you finish.

(I’m not a financial planner, accountant, or tax professional. Always check with a licensed expert before making financial decisions specific to your situation.)

Thank you for stopping by. I hope you have gained some knowledge from this post.

Remember, Strengthen Your Mind. Build Your Future and Start Today!

I’m Rob, signing off.

Download your free 1–5 Year Freedom Plan and start building the income, security and control you deserve after 50.