Retirement is a milestone in life met with potential challenges if not planned. Retirement is a time we should all strive to fill with relaxation and absence of stress. Many face financial bumps along the road of retirement due to not having the safety of a steady income. In order to avoid this, here are some different sources of income you can line up for a comfortable retirement.
Having retirement savings and a plan for your finances is needed. Having retirement accounts such an IRA or a 401K are the most common types of accounts for retirement savings. The earlier you start contributing to these accounts the better, but it is never too late to start.
Maintaining a personal savings account is also very important. Personal savings should be held in order to protect your retirement account should you have an emergency. You have to protect yourself for the scenario where you could lose income due to layoffs or some other unforeseen circumstance. Having money in your back pocket to use “just in case” you do not have income for a period of time will provide you with a safety net and protect your retirement savings. If you are caught in a pinch and really need money, you can access your retirement funds, but that will come with expensive fees and penalties. Make sure to set aside money whether it be weekly or monthly, to prepare for financially unstable periods. A general rule is to have 3 to 6 months living expenses in savings to protect yourself.
Another source of income could be to continue a seasonal job or part time work in retirement. Although being retired means not being in the workforce any longer, you may find it rewarding to work on your own terms; when you want to and how much you want to. Many experience boredom when going through retirement, especially those who were “workaholics”. Perhaps you will dedicate some time into freelancing in an area where you have expertise or pick up a job doing something low stress that you enjoy. This can be a great way to cure boredom, while also making money. There are also many part time gigs where you can earn money from the comfort of your home, sitting on the couch. Today’s society is in a booming digital age where there are thousands and millions of remote work available. Checking out different websites such as Indeed or ZipRecruiter to find remote part time work is only a click away.
Investing in things such as stocks, bonds and real estate are the staples of most retirement plans. You might find it helpful to hire a financial advisor to help you to plan a balanced and diversified portfolio. Generally speaking though, it is typically advised to invest in more stable funds as you approach retirement, while in your younger years, it is more common to seek higher yield, albeit more risky investments. The theory is that since you are younger, you’ll have time to ride the ups and downs that come with investments like stocks, which historically win out big in the long run.
Many people decide to own and operate rental properties. Long term property rentals with tenants agreeing to one or two year leases are common, but short term rentals using services like Airbnb or Vrbo are also common methods for profitably managing rental properties. Hosting allows you to be your own boss and set your own hours, leaving room for hobbies and traveling too. This extra source of income can supplement your pension, and you can even use it for yourself too!
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