Retirement is a scary notion for some seniors, not because it means getting older, but because it means switching to a fixed income with little financial wing room. If you are concerned about having enough money in retirement, here are a few things you can do to screw up extra money.
1. Keep on registering for Social Security
Your Social Security benefits are calculated by taking the average salary, adjusted for inflation, over your 35 highest paid years in the workforce. Once the monthly benefit is determined, you can begin to collect it in full once you reach full retirement age. This age is either 66, 67 years or somewhere in between, depending on the year you were born.
However, if you sign up for full retirement benefits, you will increase your monthly payments by 8% per year. until you turn 70 years old. And that increase will remain in effect for the rest of his life.
2. Get a Part Time Job
Many associate retirement with not working, but actually it is a great time to hold a part time job. This is especially true if you are used to working with a full schedule, because you may not only appreciate the extra money, but the extra structure as well.
Best of all is that you don't have to spend your free time in retirement working a job you can't stand. Rather, you can start your own business or make money from a hobby you are already dedicated to, such as gardening, woodworking or cooking.
3. Buy dividend shares
Seniors are often recommended to favor safer investments, such as equity bonds. But if you buy dividend-paying shares issued by solid, proven companies and hold them for years, there's a good chance you won't lose money in the stock market.
At the same time, you will benefit from ongoing dividend payments (usually paid quarterly) that give you access to more money during the senior years. Of course, dividends are not guaranteed, but companies with a strong history of doing them are likely to continue to do so.
4. Rent your house
If you are sitting on a large estate in retirement but do not want to reduce the size to a smaller space, you can use the extra square foot for good use by renting out part of it. This is especially possible if you have a finished basement or garage that gives a potential tenant some privacy.
If you are interested in getting rental income but do not want to take on a full-time tenant, you can rent your house out on a seasonal or weekly basis instead. If you rent out your house for 14 days or less during the same calendar year, you will avoid taxes on the rental income you collect.
5. Dispose of some or all of your life insurance
If you have a permanent life insurance that has accumulated a cash value, it can serve as a source of income when you need it. Of course, the more money you take out of this policy, the lower the death benefit paid to your heirs as you pass away. But if the recipients are no longer as dependent on the policy they once were (for example, if your children are now growing their own income), it may not be so bad.
If your savings are not robust enough to maintain a level of cost that buys you a comfortable retirement style, then consider using these and other tactics to increase your income. Fortunately, you have many opportunities to increase your personal cash flow, so weigh your choices and see which ones make the most sense to you.