With rising inflation and tightening opportunities, it is not easy to maintain your standard of living in today’s economic climate, let alone improve it. When you also have to save for your retirement in the midst of these challenges, it seems like an impossible feat to achieve.
That is where looking for additional sources of income can help. To assist you in building a better future for your golden years, here are 5 alternate sources for retirement income.
This method requires you to have significant cash at hand that you can invest for retirement. Simply put, annuities are financial contracts that are sold in exchange for either periodic or one-time payments. When you retire, you can receive either a few payments or a lump-sum payment in return for your purchase.
You can find annuities through various financial institutions such as banks, investment firms, and insurance companies. Annuities can also be fixed or variable, with the latter having a fluctuated yet higher return on investment (ROI). This makes them a good way to earn additional income if you can gather the initial investment.
Dividends are payments that you receive from a company in exchange for buying and holding its shares. By becoming a shareholder, you can benefit from regular or quarterly payments from the pertinent company, while also holding an investment portfolio in terms of stocks. If you are fortunate, the stocks you hold may also continue growing in value.
However, in order to act as one of your primary sources for retirement income, dividends have to come from a significant investment in stocks. You also need to be prepared for situations where your investment doesn’t return any income or results in a loss of value for the stocks that you purchase.
3. Savings Accounts
This is a low-risk way to get additional income for your retirement. This involves putting away your money in a high-yield savings account. With many banks and financial institutions now offering an annual percentage yield (APY) of over 2 percent, this approach can help you grow the funds that you can keep in your savings account.
But before you put all your eggs in this basket, it is important to remember that this method’s profit mechanism is very minimal as compared to other investment-based approaches. That is why, while it is a good alternate source of income for retirement, it should not be your only plan.
4. Reverse Mortgage
While looking for alternate sources for retirement income, it is common to stumble upon reverse mortgages. In contrast to a regular mortgage where you take out a loan and pay the lender back with monthly payments, reverse mortgages result in the lender paying you. This arrangement requires you to give up equity in your home, while still keeping the title to your name.
You or your heirs need to pay back the full amount as well as the interest to the lender when you no longer live in your home. This could happen due to your death, selling your home, or moving somewhere else. Keeping this in mind, make sure that you have thought this option through before moving forward with it.
5. Part-time Job
This particular way of finding different sources of retirement income is quite obvious. But it is just as effective. With the availability of remote jobs and flexible work schedules, it has also become easier for part-time gig workers to find more jobs. However, the competition is cutthroat, which means that you will need to persevere through your job hunt.
Once you find an opportunity that suits you, you can move forward with scheduling your hours in a way that they don’t interfere with your full-time job. Afterwards, you can start putting away a portion or entirety of your paycheck towards your retirement funds.
By keeping these avenues in mind, you can contribute to your retirement funds with additional sources. This helps you build a nice nest egg for your older adulthood.
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