What would retirement without savings look like? That's not as crazy a question as it may sound. By many estimates, you are going to need at least 70% of your income in retirement. Unfortunately, in our society of instant gratification, where keeping up with the Joneses is more important than saving money for the future, having a nest egg at all is considered a big achievement.

A 2019 research study from Northwestern Mutual found that 22% of adults in the U.S. have less than $5,000 saved for retirement and 46% expect to work past the age of 65.﻿﻿ In this debt-driven society, the thought of retiring penniless may not keep you up at night, but having your money run out once you do stop working should. Let's look at what life could be like with nothing much in the bank when you hit your late 60s and beyond.

Fast Fact In 2020, the average monthly Social Security benefit was only $1,509.

Social Security Could Be Your Main Income

Retirement means the end of a steady income, which is why having a nest egg is so important. Let’s say your annual income was $100,000 when you were working. That means you’ll need around $70,000 per year in order to maintain your lifestyle when you're out of the workforce. Without savings, either you would need to earn that money or cut way back if you plan to rely on Social Security.

For many people who enter retirement without any saved cash, their only source of income ends up being Social Security. According to the Center on Budget and Policy Priorities, "For about half of seniors, [Social Security] provides at least 50 percent of their income, and for about 1 in 5 seniors, it provides at least 90 percent of income, across multiple surveys."﻿﻿

With the average monthly Social Security check at $1,509 as on March 2020, it can be a big shock for seniors who were used to bringing in much more.﻿﻿ Getting by is going to be a stretch when Social Security is your only source of income. Although there are ways to maximize it, Social Security still functions best as an adjunct to personal savings. Throw healthcare costs, a mortgage, personal debt, and other expenses into the mix, and you will see that Social Security isn’t going to be enough.

Key Takeaways With your retirement possibly lasting 20 years or longer, saving for it is more vital than ever.

Lack of retirement savings can require you to downsize your lifestyle, even your living quarters.

Many seniors without adequate retirement funds would need to take a part-time job.

Continuing to work during retirement can take a toll on your health.

You May Need to Downsize Your Lifestyle

Even if you were doing well in your working years, if you did not stow away enough money, you could need to adjust your lifestyle downward in retirement. That could mean possibly moving into a smaller home or apartment; forgoing extras such as cable television, an iPhone, or a gym membership; swapping your current car—after you drive it into the ground—for a less costly one; or, if you live in a large metropolitan area, you might have the option of doing without a car entirely.

Not having enough money could even mean moving in with your adult children, which is the case for many seniors. After all, even if you make a nice profit on the sale of your house, your retirement easily could last for more than 20 years, and there's also the possibility that you could outlive the proceeds of your home sale, along with those of any other assets that you sell.

Taking on a Roommate Might Be Necessary

Often, seniors who have not saved extra for retirement, and who still own homes, turn to their homes as a source of income. For some, this could mean renting a portion of their space as a separate apartment, and for others, it could result in taking on a roommate, both of which can be fraught with risks.

Being a landlord is fine if you don’t mind sharing space, but if you are the type of retiree who values peace and quiet and doesn’t like to share, then renting a room could be a bitter pill to swallow. For other retirees who still have their homes, it could mean taking a reverse mortgage, which is not everyone's cup of tea and can be costly and risky.

Working Part-Time Might Be a Necessity

To maintain yourself in retirement you might need an extra income stream. Often, this means that either you would go back to work or get a part-time job. Although that's not bad in and of itself, when you need money, you can’t be choosy about what job you accept. Needing to work at something that you feel is "beneath" you can be rough on the psyche.

The surge in the global workforce thanks to the internet makes it easier for seniors to work remotely. Retailers are also more than willing to hire retirees because they tend to be reliable and loyal. However, if your health fails and a part-time job is not doable, then without savings, you could be facing real financial hardship.

Retirement Might Not Even Be on the Table

If you have not saved money for retirement and are not willing to make sacrifices and overhaul your lifestyle, then retirement might not be an option for you at all, particularly if Social Security isn’t enough to live on. Many people forego retirement and work for as long as possible, largely because they don’t have enough saved. Unfortunately, even if you love your work, working longer could take a toll on your physical and emotional health, so it's not ideal.

Workers of all ages have long heard about the need to save for retirement and the importance of saving enough. Still, far too often people who otherwise could afford to save shrug off the advice, putting not even a penny into a retirement savings account. Without the money saved for a retirement that could last for 20 or more years, retirees could be forced to downsize their home and lifestyle, take on a roommate, get a part-time job, or even forgo retirement altogether.