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Ideas to Increase Retirement Income
Delay taking Social Security benefits.

Once you reach the full retirement age for Social Security purposes, you are eligible to claim your benefits in full. That retirement age is determined based on the year you were born, and is anywhere from 66 to 67 years old. It is important to note that you do not have to claim those benefits once you reach that age. If you choose to hold off on filing, you’ll accrue delayed retirement credits that increase your benefits by 8% a tear. This incentive runs out at age 70, but that means if you wait the four years to start collecting, you’ll boost your benefits by a whopping 32%.

Add income-producing investments to your portfolio.

Most financial planners will recommend including a mix of stocks and bonds in your retirement portfolio. When you invest in bonds, you have the potential to make money in two ways: selling them for a price higher than what you paid for them or holding them and collecting regular interest payments. The same goes for stocks that pay dividends. Don’t forget though that both regular bond interest and dividend payments are subject to taxes, but you can secure tax-free investment income by purchasing municipal bonds. Unlike those issued by corporations, municipal bonds are issued by states, cities, and localities. Their interest payments are always tax exempt at the federal level, and state and locally exempt when you purchase bonds issued by your home state.

Consider a Roth IRA.

Many retirees rely on an IRA for retirement income, but if you open a Roth IRA, you account balance will go further in retirement. This is due to the traditional IRA withdrawals being taxable, while Roth withdrawals are not. Additionally, Roth accounts don’t come with required minimum distributions, which means you can leave your money to grow if you don’t need it right away.

Keep working.

One way to guarantee income in retirement is by working. Some choose to keep a part-time job while others use their retirement years to start a business venture. Many retirees find that they enjoy having a meaningful way of filling their newfound free time, and the extra income for entertainment and travel is just icing on the cake. Many have also stated that working part-time gives them a social outlet that help to stave off depression and other health conditions.

One more thing…

These are all great ideas when trying to generate more income in retirement, but to many financial advisors, there’s one key suggestion missing from the list: annuities. An annuity is a contract between you and an insurance company, whereby you give the insurer your premium dollars, and in return the insurer guarantees you certain benefits. While annuities are not life insurance policies, they are typically issued by life insurance companies and are considered insurance products.

An annuity can be a part of your total retirement strategy, in that you can purchase one with a lump sum or regular premium payments over time. Annuity assets grow tax-deferred, and interest is compounded. When you begin making withdrawals or receiving payouts, you will only pay taxes on the interest earned if you paid for the annuity with after-tax dollars. There is no IRS limit as to..... 

(Read More: http://www.annuityfyi.com/blog/2017/04/ideas-increase-retirement-income/ By: Rachel Summit) 

Posted 12:54 PM  View Comments

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