In retirement, you will need to discover a means to support yourself. Social Security is one of your options, and you should be eligible for retirement payments if you have worked and accumulated work credits for at least ten years. If you have contributed to an employer retirement account employment, you will ideally have access to savings as a source of income.
What if Social Security and savings are insufficient? It may be time to examine alternative means of generating retirement income. Here are three sources of retirement income listed below that may not have crossed your mind, but they might contribute to a more comfortable retirement for you.
Income from a job
Not all retirees instantly stop earning a living after leaving the workforce, and several individuals choose to continue working in retirement. Whether consulting in your profession, working part-time for a former company, or beginning a new job, working during retirement may be an excellent source of unexpected money.
Retiring with a job means you may rely less on your funds, but you should be aware that your Social Security payments could be reduced if you earn too much before you reach full retirement age.
Even if you make enough money that your benefits are lowered, you will eventually get larger Social Security payments in the future if you forego some benefits in the short term. This may truly pay off if you finish up boosting the size of your future retirement benefits, which you will need to rely on more as you age and employment becomes more difficult.
Most individuals examine their 401(k)s or IRAs when wondering where money will come from for retirement. Yet, a health savings account (HSA) can also be a source of unexpected money.
HSAs are intended to assist with healthcare costs. If you have an eligible high-deductible health plan, donations to it are tax-deductible. You are not required to spend the funds exactly as they are deposited, and you can invest the money and let the account grow.
You can withdraw tax-free funds from your HSA as a retiree if the funds are used for qualified medical costs. The option to withdraw tax-free income from this account can result in significant savings for seniors whose medical expenses might be substantial. At age 65, you can withdraw funds from your HSA for any purpose without penalty, but you will be taxed on the withdrawals at your standard income tax rate.
Consider contributing to an HSA if you can invest this money and use it as a retirement income source.
Profiting from your house
Your property might augment your income in various ways if you are a senior homeowner. Renting out a room or the entire house could be an option if you are traveling, or you could sell the house and downsize to a smaller, less expensive home while investing the proceeds in providing you with additional income.
If these three unanticipated retirement income streams can help you enjoy a more comfortable retirement, you should carefully consider them.