According to GoBankingRates’ 2017 Retirement Savings Survey, nearly 1 in 3 Americans have $0 retirement savings, and 55% have put aside less than $10,000 for their retirement. Being able to save enough to have a comfortable retirement is difficult for most folks, because of competing financial goals such as paying off the mortgage, saving for their children’s education and paying off their debts. Oftentimes, Social Security and other pensions don’t provide enough income to cover the expenses for millions of Americans. However, there are a few steps that you can take to boost the amount of money that you have to live off of during retirement.
The following are a few strategies to help you increase your income or cash flow to help you secure your personal finances once you quit working.
Get a Reverse Mortgage
If you own your own home, and have either paid off the mortgage or are close to paying it off, you might use a reverse mortgage to increase the amount of cash on hand that you have to live on during retirement. If you’ve been wondering how do you qualify for a reverse mortgage, it’s easier than you may think if you’ve kept up with the maintenance on your property, as most reverse mortgage lenders will require your home be in good repair before approving the mortgage. The best part about these types of loans is that they give you a lump sum of money up front to spend as you wish, while allowing you to continue to live in the home during your golden years.
Often times, many retirees find that if they had just a few hundred dollars extra each month in addition to their pension, they would have enough money to live comfortably. If you are already retirement age and have a lump sum saved, you could use those funds to purchase an annuity that offers immediate payouts.
There are several types of annuities, each with specific terms and conditions. The following is a brief overview of some of the most common. An immediate annuity means that payments to you begin immediately, or, you can defer your payment until some point in the future. You can have a fixed annuity that pays out a specific amount monthly, quarterly, annually or in one lump sum. Variable annuities offer the chance of earning a higher return than fixed ones, but they do not offer a specific return, and can lose money.
Another strategy for supplementing your retirement income is to start your own small business. the power of the Internet and other technology has made it easier than ever to start a home-based business without a lot of upfront cash. Good business opportunities include providing virtual services and other assistance to others, such as virtual customer service as an independent contractor.
You might also consider consulting, or something more hands on, such as opening a restaurant. Others may invest in real estate or other passive activity to generate additional income. Of course, there are many steps that you will want to take in order to increase the chances that you will be successful in your business venture, such as getting your personal finances in order to increase the cash flow that you have available to invest in your company.
Get a Part-Time Job or Start a Side Gig
If starting your own business just isn’t for you, but you don’t want to quit working completely during this stage of your life, you might consider taking on a part-time position to subsidize your retirement income. This is an especially good option if you are still in good health. Another idea is to consider starting a small side gig around a hobby, such as making small handmade crafts, to help you stay busy and bring in some extra income during your retirement.
Get a Roommate or Rent Out Your Extra Space
Finally, if you own your own home and have several rooms, or even an entire floor that you no longer frequently use, you might consider getting a roommate with which to split the expenses, or taking in a border to bring in some extra cash each month.