Retirement is the time in your life where you can finally sit back, relax, and not worry about anything. Or at least that’s how it’s supposed to be. Many retirees, however, end up finding themselves worrying about their retirement savings and how long they will last. This is something known as “longevity risk,” where individuals fear they will outlive their retirement savings.
If you’re having worries about your retirement savings, you can do two things: make the most of the money you have saved or find a way to make more money in retirement. This article will focus on the latter, highlighting ways to grow your revenue in retirement and ensure that you have enough money to allow you to do everything you want to do. Here’s how to increase your income during retirement:
Maximize Social Security – One of the simplest ways to increase your retirement income is by maximizing the amount you receive from Social Security checks. This can be done by delaying your retirement by a few years, which significantly increases the amount of money you receive when you do start drawing from Social Security.How much you receive from Social Security depends on a few things, like your income from the years you work and the age you started claiming Social Security benefits. Full retirement age (FRA) is the age you will first be able to receive` Social Security benefits. FRA is dependent on the year you are born, so, for individuals born in 1954 the FRA is 66 years old, but for individuals born in 1960 or later, the FRA is 67 years old. Here is a full list of FRA requirements for more information that also shows the deduction in benefits you will take if you begin drawing Social Security before your FRA.
On the contrary, you can increase your Social Security benefit amount by delaying your retirement by a few years. For example, if your FRA is 67 and you delay receiving Social Security benefits and keep working until you are 70 you may be eligible for nearly 125% of your scheduled benefit.
Work Part-Time or as a Gig Worker – Another option to boost your retirement income is to continue working on a part-time or gig basis. Many retirees continue to work even after their retirement in order to make more money and also to have something to occupy their time. With the increase in remote work and gig opportunities like Uber, Instacart, and Doordash, making extra money has never been more accessible.
Many gig and part-time options are incredibly flexible, making it easy to start or stop at any time based on your needs or availability. Having this extra source of income can help with your day-to-day expenses and supplement your retirement savings so you don’t have to rely on them as much. It’s important to realize that this income will be taxable, so you’ll want to set some of it aside to pay your taxes later on.
If you are looking for extra income but don’t want to work, you can also buy properties to rent out or invest in local businesses in your area to create passive income.
Invest In an Annuity – An alternative method for increasing your income during retirement is to invest in an annuity. An annuity is a contract with an insurance company that provides income for either a specified period of time or for the rest of an individual’s lifetime. Annuities can either be purchased with a lump sum or with a series of payments. Then, the individual who bought the annuity receives set payments for the rest of their lives from the insurance company which offers regularity and predictability with no concerns about market swings.
Annuities are a popular option for retirement income to supplement Social Security benefits. The main downside is that you lose control over the money you invest in an annuity, which means you can’t access it in case of emergencies and you won’t profit from market growth like other investments.
UA Abundance Packages – You can also purchase UA Abundance Packages, which are similar to annuities. Like an annuity, you pay a lump sum and then begin to receive payments in the future. However, UA Abundance Packages also benefit others as since each purpose creates funding for grants given by UA Legacy Grants.
It’s important to note that increases in income can affect the taxes you owe to the IRS, Medicare premiums, and even cause your Social Security benefits to become taxable if you move into a higher tax bracket. As long as you know what the tax requirements will be for your extra income, you can make sure to stay within your tax bracket or properly prepare for a potential increase in taxes.
At UA Legacy Grants, our mission is to empower individuals with the ability to build financial abundance for their families as well as be able to give freely to the worthy causes they are passionate about. Our grant packages help individuals and organizations to reach their financial goals, like increased retirement income, through our Incentivized Giving program. Between grant donors and our contributions, we are able to provide granted financial wellness packages to those in need.