Seniors who get all their monthly income from Social Security commonly struggle financially. That's because Social Security will generally only replace about 40% of your pre-retirement earnings, and not more. And that assumes that you're an average wage earner. If you have a higher income, you can expect even less replacement income from Social Security.
That 40% also assumes that Social Security isn't forced to slash benefits in the absence of adequate funding. That's unfortunately a distinct possibility as of now, since lawmakers have thus far failed to come up with a solution to pump more money into the program.
One great way to supplement your benefits and boost your retirement income, though, is to invest in assets that pay you on a regular basis. Here are a few great choices for retirement that, combined with Social Security, could lead to a very comfortable lifestyle.
1. Dividend stocks
With dividend stocks, you have two opportunities to make money. Your shares could gain value over time, at which point you can sell them at a profit. You can also collect dividend payments (often on a quarterly basis) and use that money as retirement income on top of Social Security.
During your working years, it's a good idea to keep reinvesting your dividends to grow your portfolio. But by the time retirement rolls around, you can simply cash out those dividends and use them to pay bills.
2. Municipal bonds
Municipal bonds differ from corporate bonds in that they're issued by cities, states, and other localities -- not large companies. As such, their rules are different.
Municipal bond interest is always tax-exempt at the federal level. And if you invest in municipal bonds that are issued by your state of residence, you can avoid state and local taxes, too.
Meanwhile, bonds in general are said to be a stable investment. Historically speaking, municipal bonds have proven themselves to be even more stable than their corporate counterparts. That means that you have an opportunity to line up a steady, predictable income stream in retirement -- and take some of the pressure off your Social Security benefits.
REITs, or real estate investment trusts, are companies that make money via the portfolios of properties they own. Because REITs are required to pay at least 90% of their taxable income as dividends to shareholders, you have an opportunity to score huge dividend payments that can supplement your Social Security income nicely.
Plus, REITs make it possible to invest in real estate without having to own actual income properties you're responsible for maintaining yourself. That means you get all the upside without the major stress. They're also a nice way to maintain a more diverse investment portfolio.
Don't just retire on Social Security
Social Security might end up providing quite a bit of your senior income. But it really shouldn't be your only source. These investments are a great way to generate ongoing income -- and give you more financial leeway at a time in life when you deserve nothing less.