Running out of money is one of the biggest fears for those in and approaching retirement. You spend so many years working and saving, and then one day that’s all the money you have to live on. Finding the right income sources for you may seem overwhelming but you can still live the retirement of your dreams without being burdened by finances. Here are a few sources of retirement income:
There are a wide array of options when it comes to retirement accounts. We’re talking about 401(k)s, IRAs, Roth IRAs, annuities, and more. Some of these options are tax-deferred and some are not. Many of these options will come from your employer who will often offer a match to your contributions. A financial professional can help you determine which plan is right for you and how to best allocate your funds to help protect from downside risk. If you are fortunate enough to have a pension, this could be another valuable income source for you. You can also want to focus on your personal savings account which you can build interest on.
Social Security was designed to replace a portion of preretirement income, but was never intended to be used as a main source of income. Those of retirement age should not rely too heavily on it as it likely won’t last forever. The key to Social Security is an optimal withdrawal strategy. The longer you wait to withdraw, the higher benefit you will receive. According to the Social Security Administration, “benefits are now expected to be payable in full on a timely basis until 2037.”1 Those approaching retirement should plan on how to best take advantage of this source of income.
There are many creative ways to find added income in retirement. One income vehicle is real estate, where people use their rental property for added income. Some people start their own small business, using a passion or talent they have. Working part-time is another option some people turn to. The possibilities are endless and you can occupy your time doing what you enjoy while making money. The key is to save enough money through other income sources so you don’t have to rely on creative sources too much.
There seems to be so many retirement income options out there, but it takes work to find the right one for you. A financial professional is a great resource to help you discover your options. No one should have to stress about money in retirement. You can learn even more about income options at a complimentary ARI course near you!