How Do I Get My Retirement Money?

Millions of Americans are worried about retirement. Fully 23% of workers are not too confident or not confident at all that they (and their spouses) will take plenty money to alive comfortably throughout retirement, per the 2019 Retirement Confidence Survey -- which as well noted that 40% of workers take saved less than $25,000 for retirement. Yikes.

Fortunately, if y'all're one of those folks in a financially precarious position, there are ways to beef up your retirement income via actions you tin can accept now and/or later. Hither are 12 ways to become more coin in retirement and strengthen your future financial security.

Image source: Getty Images.

No. i: Pay off debts

Let's starting time with debt. If you're carrying a low-interest rate mortgage, that'due south not likely to exist problematic. Simply loftier-interest-rate debt, such as from credit cards, can wreck your finances.

Many cards these days are charging rates in the high teens, with plenty charging 20% to 25%, and sometimes even more. If you're carrying $12,000 in credit carte du jour debt from year to yr and are being charged 20% interest, that's $3,000 in interest payments upward in smoke every yr. That'south peculiarly bad in retirement, so aim to enter retirement with every bit piddling debt as possible -- and know that you can pay off debt fifty-fifty if you're weighed downwards with a lot.

No. 2: Increment your saving and investing -- now

If you're working and at least a few years abroad from retiring, you lot notwithstanding accept time to strengthen your fiscal status by saving and investing more than money. Y'all're probably already doing so, just could you do a little more?

The tabular array below shows the results you'll get if you lot invest different sums over fourth dimension. You can run across how powerful information technology can be to go from investing, say, $1,000 per month to $1,200 or $1,500 per month.

Growing at viii% for	Investing $1,000 Per Month or $12,000 Per Year	Investing $i,200 Per Month or $xiv,400 Per Year	Investing $i,500 Per Month or $18,000 Per Yr
3 years	$42,073	$50,488	$63,110
5 years	$76,031	$91,237	$114,047
x years	$187,746	$225,295	$281,619
12 years	$245,944	$295,132	$368,915
fifteen years	$351,891	$422,270	$527,837
20 years	$593,075	$711,690	$889,613

Source: Calculations by author.

No. three: Work a few more than years before retiring

The table to a higher place also reflects the power of fourth dimension. It'south great if yous can relieve and invest for 20 years. Simply if you can do then for a few more than years before retiring, you can build a much bigger war chest for retirement.

The tabular array beneath illustrates clearly how much of a difference even a single additional year can make.

Growing at eight% for	$10,000 invested annually
20 years	$494,229
21 years	$544,568
22 years	$598,933
23 years	$657,648
24 years	$721,059
25 years	$789,544
26 years	$863,508
27 years	$943,388
28 years	$1.0 million
29 years	$1.1 million
xxx years	$1.ii 1000000

Source: Calculations by author.

No. 4: Work a petty -- in retirement

Instead of going common cold turkey in retirement -- from collecting a bacon to suddenly earning no coin and just living on savings and Social Security -- consider easing into retirement past working a little in your early years. You might be a cashier, for example, earning $12 per hour, and if you lot log just 12 hours per week, that's $144 per week, or near $575 per month -- or $7,500 per year in actress income, which can come in very handy. Or think more creatively and come up upwardly with ways to make more money that might be more than satisfying.

Working a fiddling in retirement is good in other ways, too. Information technology can give your days a little more construction and offering valuable opportunities for socializing, preventing you from feeling isolated and, perchance, depressed.

No. five: Make the most of retirement accounts

You may accept ane or more than IRAs and 401(k) accounts -- of the traditional and/or Roth variety -- and you may be contributing to them every year. That's very good. (If yous're non doing so, reconsider that.) You may yet not be making the nearly of these accounts, though. Know that for 2019, you can contribute as much as $six,000 to all your IRAs, combined -- plus an boosted $i,000 if you're 50 or older.

A 401(yard) account allows upwards to $19,000 in contributions for 2019, plus $vi,000 for those 50 and older. The tables higher up prove how powerful it can be to contribute more than to your accounts over time. Exist strategic well-nigh how you use these accounts, too.

For example, while 401(k)south allow far larger contributions, they typically restrict you to choose betwixt a scattering of mutual funds and other investments. IRAs, on the other manus, let y'all to invest in just about any stocks and gobs of bonds and mutual funds. A 401(m) is likely to feature matching contributions from your employer, so you should definitely contribute plenty to max that out. And a Roth IRA or Roth 401(one thousand) can give y'all tax-free income in retirement, if yous follow the rules.

No. half dozen: Include dividends in your portfolio

Another way to boost your income in retirement is to accept a meaningful chunk of your portfolio invested in dividend-paying stocks. A portfolio of non-dividend payers would require you to sell off some shares in club to generate income, leaving a smaller portfolio to keep growing for you lot. If your portfolio is generating meaningful dividend income, though, you may not have to sell any or many shares -- you can but collect the income and leave the rest to keep growing.

For instance, if you accept $400,000 distributed beyond a group of healthy and growing dividend payers with an overall average yield of iii%, yous'll get $12,000 per year -- $i,000 per calendar month. Improve still, healthy and growing dividend payers tend to increase their payouts over fourth dimension. You lot tin invest in private stocks such as Verizon Communications and Johnson & Johnson, which recently yielded four% and 2.6%, respectively, or you might opt for a common fund or exchange-traded fund (ETF) that features aplenty dividends. The SPDR S&P 500 ETF(SPY) recently yielded 1.75%, for example, while the iShares Select Dividend ETF (DVY) and iShares U.South. Preferred Stock ETF (PFF) recently yielded about three.6% and 4.7%, respectively.

Image source: Getty Images.

No. 7: Consider annuities for pension-similar income

Annuities can be another keen choice for income in retirement. You volition have to fork over a hefty sum in gild to buy one from an insurance visitor, simply by doing then, you tin can set yourself up to receive monthly checks for the rest of your life -- and the rest of your spouse's life, too. Focus on fixed annuities, as they generally don't have the steep fees and restrictive terms every bit indexed annuities and variable annuities, and learn more most them before investing.

The table below offers an idea of the income you might become from a fixed firsthand annuity in the electric current involvement-rate environs.

Person/People	Toll	Monthly Income	Annual Income Equivalent
65-twelvemonth-sometime man	$100,000	$525	$6,300
65-year-former adult female	$100,000	$496	$5,952
70-year-old man	$100,000	$599	$7,188
70-yr-erstwhile woman	$100,000	$566	$6,792
65-year-erstwhile couple	$200,000	$885	$10,620
70-year-quondam couple	$200,000	$987	$11,844
75-year-old couple	$200,000	$1,134	$13,608

Source: Immediateannuities.com.

A deferred annuity might also be useful in helping you avoid running out of money late in life. Information technology starts to pay you at a future point, such equally when you turn a sure age. A 65-year-former human, for example, could receive effectually $569 per calendar month for the residual of his life starting at age 75 for most $50,000.

No. 8: Collect income from involvement

Interest is another kind of retirement income to consider -- though it's far less appealing an option these days than it has been in the past and may be in the future. Many three-year certificates of eolith (CDs), for instance, were recently offering less than 1% in involvement.

Merely proceed an eye on rates over time, considering there could be periods when you lot could generate helpful income by deploying funds into interest-bearing accounts. Recollect that in the 1980s, interest rates were in the teens and fifty-fifty around 20% for a while. You could go more than than fifteen% from a six-calendar month CD back in 1981! Rates of 5% or more are certainly possible in future years.

No. 9: Consider a contrary mortgage

Contrary mortgages are an income-producing option for many but not all people. They involve borrowing money with your home as collateral. A lender agrees to pay yous a certain sum each month -- or perhaps a lump sum -- and you go to stay in your home. But when you movement out -- either to a nursing home or cemetery, the loan must exist repaid, typically through the auction of the habitation. Read upwardly on reverse mortgages to see if one might make sense for you.

No. x: Relocate -- to a less costly home or region

Relocation can exist a surprisingly powerful mode to generate more than income in retirement, under the right circumstances. For example, if you alive in a high-cost-of-living area or simply have a costly home, you lot might sell it and move -- either to a smaller, easier-to-maintain abode, or perhaps to a less plush region. Be sure to study your options closely and consider a wide range of factors, such as the family, friends, and back up you lot'll detect in various locations, the kind of lifestyle you can alive in them, the quality and availability of healthcare, and expected taxes and other expenses.

No. 11: Borrow against your life insurance policy

You lot might likewise be able to generate income for yourself past borrowing confronting a life insurance policy. Of grade, this is non a bully thought if anyone will be depending on that coin in the hereafter. Simply if you lot got the policy to protect your kids who are at present self-supporting adults, information technology might be worth considering.

When you infringe confronting a life insurance policy, you finer reduce its death benefit until yous repay what was borrowed. This merely works with "whole" or "universal" life insurance, not term life insurance, and the funds you infringe are normally free from taxes. (Cashing out a life insurance policy, on the other hand, by and large produces taxable income.)

No. 12: Make the most of Social Security

Finally, there's Social Security, which is a major and critical source of retirement income for most of the states. It doesn't offer a huge corporeality, though: The average monthly retirement benefit was recently $1,478, or about $17,700 annually, while the maximum monthly benefit for someone retiring at their full retirement age this year is $2,788 (nearly $33,500 annually).

You tin brand your checks bigger or smaller by choosing to outset collecting your benefits later or earlier than your full retirement age, and there are other ways to increase your Social Security benefits, too. For instance, yous might strategize with your spouse most when you'll each start collecting, perhaps opting to delay collecting for the higher earner in order to brand those bigger benefits even larger.

Take some time to acquire more than about the various sources of income you might take in retirement, and plan whatsoever actions you lot might want to accept now or later on to all-time position yourself for a comfortable future.

Source: https://www.fool.com/retirement/2019/12/30/12-ways-you-can-get-more-money-in-retirement.aspx

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