There Is More Than One Way to Generate Retirement Income
A foundational planning question that we often address here at Oakwood Financial Group is the idea of retirement income. This is the income you formally receive once you are retired. You can generate retirement income from things like social security, a pension, savings, investments, part-time work, and the list goes on.
Retirement means different things to different people. Your space may look different from your neighbor, colleague, or friend, so it’s essential to look at your personal space when doing your planning. Remember, your retirement income is based on many factors, so a detailed retirement plan is always a good idea. This will provide you with a map to know where you need to be and how to get there.
There is more than one way to create retirement income for yourself. Let’s look at four of the more mainstream ways to generate income after you retire.
Social Security
Many young people today are retirement planning with the idea that there will be no social security once it’s time for retirement. As of the writing of this blog, social security is still available. So, if you are close to retirement, you don’t have to worry about that at this point. Be aware of what your estimates are. You can begin receiving benefits as early as age 62; however, if you wait until your full retirement age, your benefit amount will increase. Check with the Social Security Administration if you’re unsure about the details of your benefits.
Pension Income
Fewer and fewer folks are in this space. A generation ago, this was very prevalent, and many people depended on that income upon retirement. Unlike a 401K, the employer bears all the risk and responsibility for funding the plan. A pension is typically based on your years of service at a company, compensation, and retirement age. If you’re one of the lucky people eligible for a pension, be sure you understand the details of your plan.
Portfolio Income
Portfolio Income is money received from investments, interest, capital gains, and dividends. This money comes from assets such as the stock market, 401K, real estate, or other types of investments. It’s important to know what assets you have and what they can produce for you not just today but five, ten, 20, 30 years into retirement. Given today’s life expectancy, retirement is another season of life, so 30 years in retirement is not unlikely.
Business or Part-Time Income
You may have partial or full ownership of a business that provides you some level of passive income. Many people continue to work into retirement. We are living longer, and health care is much better than it was a generation ago. Hence, there are opportunities to work into retirement and provide benefits or supplemental income for yourself.
If you have questions about your financial space or are looking to create a retirement plan, give us a call at (412) 928-8801 or visit us at www.oakwoodfinancialgroup.com. If you wish to schedule an introductory meeting, we would be happy to meet with you at no cost or obligation to you.
These Blogs are provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of SagePoint Financial.
