Given the precarious state of the national economy, many older Americans are concerned that they haven’t saved up enough money to last their entire retirement. As such, it’s never been more important for retirees to have reliable ways of generating income even after leaving their jobs. In this post, we’ve compiled a list of 5 essential ways that seniors can earn consistent income even after ending their careers.
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1. Social Security
Once you reach the age of retirement and qualify for Social Security payments, you’ll begin receiving payments as long as you’ve met the minimum requirements for having paid into the system. While you are first eligible to receive these benefits from the age of 62, you’ll need to wait until turning 66 to qualify for your full benefit. More than 50 million Americans receive Social Security payments each month, and for many seniors, this is the most reliable source of earning income throughout retirement.
Pensions fall under the category of defined benefit plans, which means that retirees are guaranteed a fixed amount of income each month. The exact sum is dependent on the terms of the contract, and it’s usually dependent on how long you worked for that employer. One of the benefits of receiving a pension is that you don’t have to worry at all about the investment decisions—all of the technicalities are out of your control and you’re guaranteed to receive a fixed amount of income.
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3. Starting a Business
While some retirees may scoff at the idea, the reality is that it’s never been more feasible for seniors to start a business in retirement. While it’s true that retirees may face unique challenges in getting their businesses off the ground, the statistics indicate that retired entrepreneurs are significantly more likely to achieve success than their younger counterparts. By reducing your overhead costs and capitalizing on the connections you’ve nurtured throughout your career, launching your own startup is well within the reach of countless retirees.
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4. Reverse Mortgage
Ideal for older Americans who are in need of cash, reverse mortgages allows homeowners to sell equity of their home for cash. A huge advantage of reverse mortgages is that they won’t disqualify you from receiving your government benefits, so you’ll be able to enjoy an influx of money without worrying about negative consequences. Additionally, it’s much easier to receive a reverse mortgage than it is to be approved for a loan through a bank. Plus, the income from reverse mortgages is generally not taxed.
5. Real Estate
Investing in real estate is a sound financial decision which protects retirees against inflation far more effectively than traditional income streams such as pensions and Social Security. While it’s true that real estate requires an investment in order to generate income, once the initial investment is made you’ll have the opportunity to earn profitable returns for the duration of your retirement—and beyond.
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