When it comes time for retirement, dependable streams of income are required. You need to have financial stability into your 60’s, 70’s and beyond. This stability can be achieved with proper retirement income planning. Especially for business professionals, it can be tough to slow down after working for decades straight. Luckily, a well balanced retirement plan can keep your financially and mentally stable. Here are five sources of retirement income planning to utilize after the age 62.
Even without the best IRA account, you can start saving for retirement as early as possible. If you are a responsible professional, you might have started saving upwards of $1,500 per month. Using a retirement income calculator, just $18,000 saved annually could get you $3,000 per month in retirement. That would be the same as a $36,000 annual salary. The best part, you are able to save this money entirely on your own over 20-30 years. With proper planning, your retirement savings can be a primary income source in the future.
Buy An Annuity
Similarly, an annuity provides you control over your retirement income. In exchange for a upfront, lump sum payment to an insurance company, you receive monthly payments for the rest of your life. Depending on your liquid cash savings and life expectancy, an annuity can be a smart purchase and stable retirement income source. You should carefully plan buying an annuity for your retirement. Otherwise, you could end up with less monthly payments that you need financially.
If your company offers a pension plan, you can calculate your pension retirement income. It will vary based on the amount of contributions made by your employer, tenure at the company and level of compensation you received over the years. As you can imagine, someone in a business analyst role would have a smaller pension than the top CEO of the company. While pension plans are great source of retirement income, they depend on the company’s financial viability. Unlike the previous options, if the company stops operating or terminates the pension program, your income can be frozen. While many professionals rely on pension income in retirement, you should also have other income streams to diversify any risks.
Social Security Income
Next, you should plan on claiming your social security income. This retirement income is most common for American professionals. In most cases, it accounts for more than half of their total retirement income. However, there are many concerns about how long the social security funds are going to last. Thus, you should strategically plan when and how much social security income you will claim. Once again, this is a stable income stream so long as it is supported by the United States federal government.
Typically, your retirement savings accrues interest. If you were able to put aside enough money over the course of your professional career, you can continue to live of your interest income. In fact, in retirement, other former-business executives have changed their investment strategies. Using an advisor like lightyear capital, they adjust their asset allocation and risk tolerance to meet their retirement needs. Certainly, it can be a sustainable retirement income stream as long as your earnings are positive.
These are some of the most common types of retirement income. In order to plan for your retirement, use a calculator to determine how much money you will need on a monthly basis. Then, analyze which retirement income sources will best fit your current financial situation. It is never too late to start saving and thinking about your financial future. When retirement planning is done right, you are set up to have a stable and happy future ahead.
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