How Will You Fund Your Retirement?

Have you considered how you will fund your retirement years? Income is a straightforward concept during our working years but it’s a whole different story during retirement. Depending on the lifestyle you want, you may need retirement income from different sources. Chances are income from a single source will not be enough to fund your retirement.

Retirement income could be from different sources. Here are just some of the ways to fund your retirement.

1. Private and Public Pensions: While pensions are essential to fund retirement, they may not be enough. Factor in the lifestyle you want when you retire, the number of years you can realistically expect to enjoy retirement and then consider income you can expect from the pension.

2. Savings: Savings are helpful but not nearly enough to fund retirement years. You can expect a decent return on your savings but in the end, relying solely on savings may not be prudent.

3. Investments: Investments can be an important source of income during our retirement years. However, keep in mind that you ideally want investments that provide a steady stream of income with a certain degree of certainty. Obviously, at this stage, you are most likely not looking for high risk, high return investments. Retirement is not the time to take risks with your limited income.

4. Property Income: If you are lucky enough to have bought property during your working life then you can take advantage of rental income when you retire. Rental income may not seem significant but can provide a steady stream of income with high degree of certainty.

5. Annuities: Annuities such as bonds are a great source of income. Annuities provide fixed periodic income for a predetermined term. The benefit of this source of income is that at the end of the term you get your principal at maturity plus you know the exact amount of your periodic payments.

6. Down-size: You may want to consider selling your property and downsizing. Consider moving into a small property during your retirement years. By the time you retire, your children have moved out and you probably don’t need all that space. Downsizing allows you to move into a smaller property with money left over to save or investment.

7. Part-Time: Part-time work is another way to integrate into your retirement income. Part-time work alone is not going to be enough to support your retirement but it can help if you are struggling to maintain a steady income stream.

As a retiree, you will most likely need multiple income streams, which could be a combination of any of the above. Having multiple income sources can provide added security and peace of mind during your retirement years. The best way to ensure your retirement is funded properly is to plan and start building up your retirement fund as early as possible.

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