5 Ways to Build an Income Stream in Retirement
By Nick Davis
Most pre-retirees and retirees ask the question, “Will my money last throughout retirement?” While I believe that a well-planned retirement can help make your life savings last, extra income streams in retirement are great for providing added confidence throughout retirement, as well as a little bit of financial padding.
But if I’m retired, how can I earn income?
I’ve made a list of seven smart ways to earn a little extra income in retirement below.
Rental properties are a smart way to earn extra income in retirement. If you have one or two rental properties, the renters can provide a steady stream of monthly income. There are a few important things to consider before using rental properties as additional income.
One, you need to vet your renters well. Having unreliable renters who don’t pay on time will add stress rather than relief to your budget. Two — keep the property well-maintained. Whether it’s from the renters who are living on the property or just average wear and tear, it’s important to keep the value of the property up by taking detailed care of it.
Systematic Withdrawals from a Balanced Portfolio
With a balanced portfolio that has the appropriate amount of risk for your individual financial situation, you can systematically withdrawal money monthly from your accounts. This regular stream of income is a good way to help fund your retirement.
Whether you’ve begun to take Required Minimum Distributions or not, it’s a good idea to plan for how much to take out of your accounts each month. The only downside to this plan is that the market does have down cycles, and this can affect the amount of money you have in your accounts overall.
Part-Time Jobs and Side Hustles
There are lots of benefits to working in retirement. Yes, you may have worked most of your adult life to get to a point where you aren’t working anymore, but I’m talking about something a little different. If you work a part-time job in retirement or you have a small side hustle, you’ll not only be creating regular income in retirement, but you’ll also be more likely to enjoy the work (since it’s no longer required, but something you chose) and you’ll stay mentally healthier, as working can help reduce the risk of dementia.1
Fixed Index Annuities
If you’ve ever played the lottery, you know they have a lump sum option and an annuity option. One pays you a heavily-taxed lump sum, while the other will pay you a percentage of your winnings every month or every year taxed at a lower rate. A fixed index annuity is a similar concept to an annuitized lottery payout. Like the lottery, your retirement accounts or savings are a large amount. Even if you weren’t able to save the way you wanted to, your retirement is still typically the largest amount of savings you have.
Maximize Social Security
While many retirees consider Social Security to be a vital part of their retirement income stream, they may be missing out on portions of income because of their filing methods and Social Security timing. Delaying Social Security may be one retiree’s best course of action, while it may benefit another to take it at 62. In fact, according to Bankrate.com, there are 567 total ways to claim Social Security benefits. That’s a ton of options! By reaching out to a retirement professional, you’ll discover the best way to claim benefits for your specific financial situation and ensure that you’re getting the most income over the course of your retirement.
Contact me today to find out how you can better generate income in retirement. Call our office at (214) 988-9178 to learn more.
Source: Old Blog
Ready to Take The Next Step?
Schedule a visit with us today — and get started on a strategy for your ideal retirement!