Americans are living longer, healthier lives than ever before.
That’s great news. But with that great news comes a challenge: most Americans feel unprepared for retirement, unsure that the nest egg they have put away will last them through their later years. In fact, according to the Insured Retirement Institute, 75% of retirees believe they will fully deplete their assets during retirement. Is this you? Thankfully, you can put retirement income strategies in place to alleviate fear and mitigate the risk of exhausting your resources.
The goal of retirement income planning is plain and simple: create predictable retirement income out of the assets, investments, and social security you have accumulated – ensuring that your resources outlive you.
Below are some tips and tricks to ensure your retirement income lasts:
5 Ways To Ensure Your Retirement Income Lasts:
- Create a Monthly Budget – You’ll need to create a monthly budget to ensure your necessary expenses are covered every month. Calculate your monthly needs and take out of your budget the amount of Social Security and other income streams needed to cover this month by month, then build a strategy around discretionary expenses.
- Maximize Social Security – Wait until your maximum retirement age to start Social Security, instead of jumping in at 62. You’ll have a significantly higher monthly retirement income.
- Tax Efficient Withdrawals – Every penny counts in retirement, especially when it comes to tax savings. Every retirement account is taxed differently, so you must be strategic when withdrawing money. Honestly, the tax world can be really complicated, and it may be best to hire a financial advisor to help you strategize.
- Diversify Your Portfolio – Retirement investing is just like any other investing when it comes to wisdom: you’re looking for the highest return with the least risk of loss. Invest in a mix of assets that will allow your portfolio to withstand any economic turbulence.
- Think Outside the Box With Passive Income – Real Estate, stocks/bonds, and annuities aren’t the only ways to generate retirement income. Get creative with investing in small businesses that can provide a lasting income.
Not only will investing in that small ice cream shop on the town square provide you with retirement income, it’ll keep you active and engaged as you age. However, these ventures can be risky and you still need to invest widely.