Fallback Plans for Retirement Savings

There are so many options when it comes sources for retirement income. Some of the common options include defined benefit plans, defined contribution plans, savings, and Social Security. However, these sources may not be enough for many people. You may need to get creative to boost your retirement savings. Here are a few options that could help:

Home Equity

Owning a home can be a great investment, and it could be a valuable asset as you approach retirement. “If you own your residence outright, or have built up significant home equity, two of the most common ways to use your home to provide retirement income are to sell it or obtain a reverse mortgage.”¹  “On the other hand, taking out a new mortgage means you must cover the cost of the mortgage month in and month out. If you go this route, it will be extremely important to manage your money to ensure it generates enough income to pay your mortgage.”¹ If your house has appreciated in value from the time you bought it to retirement, you could downsize and use the extra money for retirement savings. 

Investing

Investing your money is a common method used by many individuals to earn passive income and offers many different options. You have annuities that offer a lump sum of money for the rest of your life and protects you from downside market risk. There are also bonds which allow you to “get interest payments and the promise of repayment at specifies future date.”³  Investing in a small business is another option that will allow you to act as a silent partner and hopefully earn money.³

Working in Retirement

More and more people are continuing to work in retirement these days. Working part-time could be a worthwhile option for you. Potentially delaying retirement to earn more money could also be a fallback option. “Nearly 20% of the income reported by Americans age 65 and older comes from wages.”²  You could also start your own small business based on something you’re passionate about. Working in retirement can be a great way to occupy your extra time and boost your retirement income.

There are so many unknowns when it comes to your retirement. That’s why it’s important to have fallback options. While the typical sources of retirement income are great, there is a chance you might need something more. Consult a financial professional to help determine the best options for you that will set you up for success!

1. https://www.finra.org/investors/learn-to-invest/types-investments/retirement/managing-retirement-income/sources-retirement-income
2. https://retirementplans.vanguard.com/web/enc/pdfs/RILongBroc.pdf
3. https://www.newretirement.com/retirement/passive-income-ideas-retirement/

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