Other Ways to Finance Retirement

By on February 6, 2017
Other Ways to Finance Retirement

After you have spent a lifetime saving and working, retirement might seem to be the light at the end of the tunnel. Many of us see it as a time of relaxation and rest. A place in time where we can finally enjoy the fruits of our labor. We might envision a source of income that is steady while not needing to face the daily grind. 

Yes, it can be a wonderful vision, but being able to generate income while not going to work can be a concept that is sort of murky when we are still in our working years. We know exactly what we want but are not quite sure how it can happen. It is possible to make your nest egg turn into a flow of cash that is steady during your retirement years. Let’s take a closer look at how that can happen.

Home Equity

You might be able to use the equity that you have worked so hard to build in your home in order to help finance your retirement by taking out a reverse mortgage. As many as 44% of people who have retired report having used some of the equity they have in their home to assist in paying for their retirement and there are many more retirees who are interested in finding out more about the process. 

With a reverse mortgage, the bank will loan you money based on the value of your home and your age. You have to be at least 62 to qualify. The amount you can get will vary based on your age and the value of your home. You need to have already paid off your mortgage or have paid on it until it is nearly paid off. 

There are stipulations that you should be aware of. One of them is that you have to still reside in the home. If you leave the home (like to go to a nursing home), or move, the loan will need to be repaid. When you die, if the loan has not been repaid, the home will go to the bank, unless your heirs decide to pay for it.

This is a great way to monetize the equity in your home.

Rental Properties

Rental real estate is responsible for providing nearly 21% of retirees with income. More than a third of people not yet retired will retire with expectations of receiving rent to finance their retirement. There are ways to do this without a lot of headaches. You need to know what you are looking for in a tenant, use your best tactics for marketing, give your curb appeal a great facelift, and screen all of your applicants as much as possible.

Part Time Jobs

Nearly two-thirds of people who retire will go out and get a part-time job. This might be for a couple of reasons. One, of course, is to supplement their retirement funds. Another reason could be that once they retire, they find that they grow listless and bored. Having another job gives them something to do with all of that time that they suddenly have. It gets them out of the house and brings a new sense of purpose to their lives.

Stocks

Mutual fund investments or individual stocks can provide income to people in their retirement. In fact, 40% of retirees use this as a way to supplement their retirement. Even more people still of working age hope to use gains in the stock market to propel them into a retirement that will be uber secure.

Depending on your retirement from Social Security just isn’t as safe as it used to be. This year, the average Social Security check will be around $1360. That might pay the bills, but only just. Yes, there was a COLA this year, but it was only 3 tenths of a single percent. That doesn’t add up to very much at all. For this reason, it is probably more than a good idea to make sure that you will be able to supplement it with some other ways of generating money. Hopefully, the ideas above will help you to do just that and be comfortable in your retirement.

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