Retiring from work might have you reaching for the Champagne now that you have no more early starts, but there are other worries that might be pressing on your mind, like how you'll ensure a steady income from here on.
However, there are lots of smart investment decisions you can make now to ensure you keep that money rolling in to pay for retirement. Read on for our best retirement income strategies to help you navigate the costs of your senior years.
You can look at your social security benefits in retirement as a potential avenue for more financial security. Here are three ways:
For example, you can delay your claim for one or two years after your retirement age. This delay could improve your income from benefits. It's also worth looking at what your financial benefits are if you are married and, likewise, if you are widowed.
It's always worth getting professional advice about social security benefits to help you navigate any bureaucracy and ensure you are receiving all your financial entitlements.
Withdrawing money from your IRAs and 401Ks will help you feel more financially secure during retirement. However, being frugal and taking out only the money you need can help the rest of your account grow and give you a better long-term income.
Effectively timing these withdrawals can also help you manage your taxes, so it's wise to consult a financial advisor for recommendations.
For example, if you have a Roth IRA, consider balancing withdrawals from this over your traditional 401k to reduce your tax burden since Roth IRA withdrawals are tax-free.
An annuity is an excellent source of income in your retirement and can help you achieve peace of mind with your long-term income. Fixed annuities offer a steady, guaranteed income.
If you are planning to move to a senior living community, that money could cover some of the ongoing costs of your care or your retirement apartment. If you have savings, you should consider purchasing an annuity with these, or you could use income from your salary if you're still working.
You could opt for variable rather than fixed annuities. These fluctuate with the market but could potentially offer you higher returns.
Downsizing is a practical option if you have reached that stage in your life where children have left home, and you are faced with the upkeep and maintenance of a big family home.
Selling a large home and moving into a smaller apartment in a retirement community can free up cash you can invest elsewhere to help boost your monthly income.
Downsizing also cuts many of your expenses in later life, like repair bills for your property or utility costs of heating your home. You may also have the opportunity to sell any furniture you no longer need in your new home, giving you money to spend on income-generating investments instead.
If you aren't ready to sell your home, you can choose a reverse mortgage instead. A reverse mortgage helps you gain equity in your property while still maintaining ownership of it. It allows the mortgage to increase debt and reduce equity in your property over time.
Investing in stocks, bonds, and mutual funds can ensure your money works harder for you, offering a regular income through dividends or interest.
These regular payments you'll receive will help you achieve a steady income that will support some of your retirement costs, whether that's care support, health expenses, or simply having money to go out with friends and enjoy yourself.
Any investment comes with risk, so it's crucial you seek recommendations from a senior financial planning advisor. They can help you build a diversified portfolio to maximize your returns while lowering your risks.
You may already have long-term care insurance, but if not, it's something to consider when considering your retirement years.
This insurance helps cover the costs of extended care needs, like help with everyday activities in a senior living community or nursing home costs.
If you are concerned about potential costs due to ongoing health issues, this is something that will give you financial security, as you won't have to dip into savings to cover unexpected expenses.
It's always best to purchase this type of policy while you're young and healthy, so invest as soon as possible.
Many new retirees prefer to continue with a small amount of work to help provide a top-up income. This could be an option for you.
If you have an established career in a professional field, you may be able to offer ad-hoc consultancy services to local businesses or your ex-employer.
Alternatively, perhaps you have creative talent and could make some money on the side by selling crafts on sites like Etsy. Part-time jobs help provide some extra income, keep your brain active, and give you a stimulating challenge to focus on each week.
One tax-free savings option that might be valuable to you is a HSA (Health Savings Account). It's tax-deductible, too.
When you have medical expenses, you can withdraw from this savings account, and that money is tax-free. If you are worried about long-term health issues and do not have the funds to cover costs, an HSA is a valuable resource to have at your disposal.
Start saving money in an HSA as early as possible to get the maximum benefit.
Don't face a retirement panicking about money. Being proactive is the solution. Use our suggestions on retirement income strategies to ensure you have a dependable financial position in your later years.
That way, you'll get to enjoy your time in the best environment, like our beautiful community here at Addington Place of Prairie Village.
With a vibrant, active lifestyle on offer and the care of dedicated staff, it's everything you are looking for in a retirement home in Prairie Village, KS. Contact us today to discover more about our amenities and services.