Are you retiring and would want to still have that steady income that you will use while you are outside work? Retirement incomes will surely allow you to continue your living as comfortable as possible even if you have already ceased work. In this line, it is essential to know what the best sources of retirement income are so that you will be able to prepare for them even before you hit your retirement age.
The following are the 12 best sources of retirement income:
1. Retirement Accounts
Retirement accounts such as IRAs and 401k are the best sources of retirement income. If you withdraw the money in retirement, you also get to defer taxes on your investment earnings as well as retirement savings. With retirement accounts, you need to withdraw a required amount each year after 701/2 years to avoid penalties.
2. Social Security
Social security is another source of retirement income. Make sure to get a socials security account earlier to avoid higher monthly payments.
3. Roth accounts
Roth accounts may help you have tax diversity and be able to maximize your retirement money.
Purchasing an annuity also allows you to get your monthly pensions when you retire.
5. Your house
Upon reaching your retirement, you must have paid off the mortgages of your house, which means that you already have reduced your monthly expenses. Your house may also be a source of income in case you need money for other purposes.
6. Health Insurances
Health insurances may not give you cash, but it helps lessen your expenses for your medical needs. Since you will reach retirement inevitably, you must expect that you may need some of these medical services when you get old.
In your retirement, you can actually put your savings in the stock market to keep up with the inflation and grow your portfolio.
Bonds provide a predictable source of a retirement income and they also have limited risks for losses. You may even have a return of investment that keeps up with the inflation.
9. Savings account
Your savings account that you have kept even before retirement can give you a good source of income. Your savings accounts may be used in case of emergency expenses. Your savings should be equal to years of your work.
10. Part-time job
Most retirees don’t want to just stay in the house and do nothing. Getting a part-time job is not only beneficial for your pocket, but is also beneficial for your health because it constantly allows you to employ physical as well as cognitive skills to slow down the degeneration process.
Most people also invest in properties that may acquire continuous income through rentals. You may have an apartment or a space for other people to rent while you are already retired.
If you are lucky enough to get an inheritance, this is another best source of retirement income. However, this may not be the best because only up to 7% has inheritance that is sufficient to fund living after retirement.
Frequently Asked Questions
What sort of part-time jobs can I get after retirement?
Of course, you won’t be doing the same work that you did before. There are a lot of online jobs that keep you productive while at the comfort of your home.
Can I get a retirement income even before I retire?
Yes, there are certain retirement income sources that allow you to get a portion of your retirement money even before retirement. This called early withdrawal. However, if you do this on your retirement accounts you are not waived of taxes and the money that you get early will be taxable.
These are the possible sources of a retirement income; nevertheless, there are other things that you could do to maximize your money for living. If you have other means of funding a retirement, you are free to leave a comment.
JOhn Williams, a writer that blogs, his site focuses on pay day loans tip and like to help customers with payday technicalities.