5 Ways to Increase Income in Retirement
Sep 07, 2016
A general rule in the world of retirement finance assumes you need $1 million in your retirement account to generate an annual retirement income of $40,000. If you are not on track to have this when you retire, or you think you’ll need more than $40,000 per year to survive, here are some ways to generate additional retirement income.
Considered a “private pension” by some, an annuity is a tax-deferred financial product offering security and some degree of flexibility. Depending on the type of annuity you buy, you can choose to contribute a single lump-sum or in regular installments. Payments can be immediate or deferred.
Just because you’re retired doesn’t mean you can’t work. If you’re feeling restless or bored, or need more money to maintain the standard of living you want, postretirement work may be for you. Consider starting your own business or taking on a part-time job two or three days a week.
On a related note, owning and renting out property can be a lucrative side gig for a retiree. If you are unable or uninterested in acquiring new property to rent but have a guesthouse or spare bedroom you never use, you can rent that out.
Individuals aged 62 and older can convert home equity into income without having to sell property or pay additional bills. This form of cash-to-equity is called a reverse mortgage.
If you’re owed compensation from a personal injury claim or similar proceeding, you can accelerate the payout via a mechanism called a structured settlement. In a structured settlement, you usually have some authority over how frequently you receive payments.
Hopefully these tips have given you some ideas for generating additional income during retirement. For additional retirement planning advice, including the impact these options may have on your current income streams, please speak with an experienced financial advisor. If you’re a broker yourself, check in with Brokers Alliance about how you can use financial advice like this to better market and sell your financial products. Call (800) 290-7226 to learn more!