Enhancing Your Retirement

The good life

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Given the uncertainty of the economy over the past few years and the fluctuations in the stock
markets, it’s no wonder that people are increasingly unsure about how financially secure they
will be once they are ready to retire. Recent studies have shown that as much as 40 percent of
people believe that no matter what they do with their money, they won’t be able to generate the
income they want when they retire. Meeting with a financial professional is always a good idea,
especially if you are unsure about your investments and how to diversify your portfolio. But there
are also ways you can work to proactively enhance your retirement income.

Delay Social Security Benefits.

While you are perfectly within your rights to retire at 62 if you would like, it’s best to wait until the
full retirement age of 66, if possible. If you retire at the age of 62, there will be a significant
reduction in your benefit amount, up to a maximum of 30 percent. When you are living on a
fixed income, that sort of reduction can quickly add up. At the age of 66, you will receive your
full benefits, but let’s say you can hold off until the age of 70 you can often expect to receive
up to 32% more in benefits than you would if you retired at 66. So if you are able to delay
retiring and collecting benefits, this is an easy way to enhance your retirement income, without
even investing anything other than your time.

Working After Retirement.

You can continue to work part time,
freelance, or other side jobs if you want to stay busy but
work on your own terms. This can be a great way to boost your retirement income because it
may be pursuit of work you enjoy, a hobby you weren’t able to devote as much time to before
when you worked a full time job. However, bear in mind that if you retire early, there are limits
on how much income you can collect alongside the benefit payments you receive, the money
will be taxable, and there will be a reduction in your benefits amount. If you retire at age 66, this
is less of a concern as you will receive your full benefits amount, though you are still subject to
being taxed if your income exceeds a certain amount.

Consider an IRA.

There are benefits and downsides to both the traditional IRA and the Roth IRA. With a
traditional IRA, you can expect upfront tax breaks annually, though a Roth IRA might serve you
better in the long run. The advantage of a Roth IRA is that money contributed which
would be a maximum of $5,500 per year (or $6,500 for those aged 50 and up), subject to income
limitations is allowed to grow completely tax-free as long as you do not withdraw it for an
unqualified purpose.

About The Author

Thomas

A husband, father, brother, uncle and cousin to a great group. I'm an budding entrepreneur that has interest in making money that will sustain deep into retirement. At this point in my life I see no reason why I shouldn't get my piece of the pie.