Many Americans say they do not plan to work during retirement, but when it comes time to actually retire, they may not have built up enough savings during their career to achieve this goal. Even with a truckload of cash, it is difficult to live off the principal alone. So how can you find new sources of income during retirement? There are a variety of ways to come up with extra money during retirement. The route you go depends on your financial situation, so make sure you speak with a financial advisor before making any changes to your retirement plans.
Social Securitymay be the most common form of retirement income as most retirees rely on these benefits to cover their monthly expenses, however these funds can be spread pretty thin. If your monthly benefits check is not enough to cover your expenses, then here are a few ideas to keep you going.
If you have a decent chunk of money and you’re looking to put it to work, this is the best way to earn income during your retirement. A broker will help you create a portfolio that is tailored to your needs in retirement. To avoid making common investment mistakes, speak with a trusted adviser to help you make your decisions.
Some retirees choose to use a reverse mortgage or sell their homes to fund their daily expenses during retirement. This is an excellent option for anyone who has plenty of equity and owns their home, which is an incentive to reach retirement age and be mortgage-free. If you still have more than five years left on your home mortgage and you’ve retired, consider refinancing the loan for lower payments. You probably won’t pay off the loan in your lifetime, but the payments will be much smaller than those of the mortgage you signed 20 years ago.
If you have a permanent life insurance policy, it’s possible to turn that into cash. If you’re struggling with coming up with money, speak with a licensed insurance broker to see if this option might be good for you. There are some caveats to be aware of when choosing this option, so make sure you do your research.
If you rely on a pension from your former place of employment for your day-to-day expenses, you should be careful. Pensions are fast becoming an extinct concept in today’s modern workforce. As a pensioner, you should know your pension’s funding status and its hurdle rate. Knowing whether your pension is adequately funded can help you better prepare in retirement and avoid surprises down the road.
Hobbies into Jobbies
Many Americans say they’ll never work in their retirement, but the reality is many go back to part-time work. Having the extra money around is never a bad thing, and lots of people rely on the income for day-to-day expenses. You can turn your favorite hobbies into income-earning opportunities. Teachers can offer part-time tutoring, while skilled persons can offer to teach others their trade.