|Retirement (Photo credit: Tax Credits)|
- Savings should be highly prioritized during your working years. Treat your savings funds like money already spent so you won’t get tempted in using it for unnecessary spending. This is the most reliable source of retirement income as you can invest it in a high yield money placement where you draw only the interest earned and keep the principal to generate more income from interests gained. Of course you need to be extra careful in choosing the bank or financial institution where you keep your most valued and hard earned savings.
- Social Security to date is the major source of income for a greater number of retirees. Relying on this mainly may not provide you a very substantial amount to finance your daily subsistence but it is reliable and steady. Augmenting it with other sources is highly recommended.
- Pension Annuities are precise instruments that help you transform value of pension into periodic source of income. It is essential to be careful in purchasing a pension annuity as it is a long term contract and can be your reliable source of income after retirement. Choose a reputable and stable financial institution that offers this instrument. You have options to obtain it monthly, quarterly, semi annually or annually. You can also choose to obtain income which remains the same without any fluctuation or one which increases every year through set percentage or inflation.
Ways to Augment Retirement Income
- Personal pension schemes matched by employers like IRAs and 401k in America can help when you are a disciplined spender but unfortunately for most retirees they tend to overdraw from these sources of retirement income - that they readily deplete it in a short period of time. When real need is there, chances are the money is all gone and they go broke. It is suggested that you treat this source as a monthly paycheck just like when you were working. Draw a monthly amount that will make your reliable source of income last as long as you live along with your partner in life.
- Rental income from real estate investments can also become your reliable source of retirement income. As long as your property is leased, you have a regular income. It is therefore important to have savings and investments while you are working as this can help sustain you throughout your retirement years.
- Royalties can also give you some retirement income. This is from patents, books and record you have registered in your name during your working years.
- Investing in stocks while you are working can also provide you a reliable source of income when you retire. This entails savings during your productive years and wise spending as well. Majority of senior investors though are not so happy with the yield they derive from this nowadays but still it can augment your spending fund when you retire. Get advises from reputable consultants on this field and always be updated on how your stocks are currently doing.
Circumstantial Retirement Income
- Inheritance for some lucky persons with parents or relatives who are quite well off can help fund their retirement. Of course this should not be relied on 100% as depending on circumstances, you can be written off their will or probably they can outlive you. Think of this only as a surprise if and when it happens.
- Home equity for some is an inevitable source to fund their retirement. To most, their home is their biggest asset though depending on your needs, it will make you not leave anything to your children as inheritance.
- Part time work for some is an option especially if they are not careful with their finances. At the time when you are supposed to take it easy in life, you will have to take on part time jobs to finance your retirement. On a positive note, this will make you more active and feel useful that is a motivation to do well in whatever responsibilities you take on for this purpose.
Being financially ready for retirement can make you live longer. You save yourself from unnecessary stress and make you grow old gracefully. As we all probably know that stress is the number one cause of dreaded diseases - so it is strongly encouraged to save up during your productive years for a stress-free retirement years.
About the Author:
Mackenzie Salis is a freelance writer, a professional blogger and an enthusiast advocating finance awareness via online exposures for 3 years. She is the author of the site: Credit Counseling that can provide all valuable information about loans and warn you against fraud online.