As you leave work for the last time, you’ll begin relying on your hard-earned retirement income sources to help provide an income stream that will see you through your retirement years. And creating a wealthy retirement starts with knowing what your sources of income will be.
If you’re heading into retirement, the last thing you want to worry about is how you’ll continue to make money. Instead of relying on just one source of income, many people find themselves with several streams of income to support them.
Did you know that most millionaires have seven streams of income? (Source: IRS)
Luckily, there are multiple ways to watch your money grow in retirement. From Social Security and retirement plans like a 401(k) to investing in the stock market- the choice is up to you.
Here are some retirement income options to consider in 2023.
Due to the cost-of-living adjustment (COLA), approximately 70 million Americans will see a 8.7% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2023.
Social Security is a great friend to have during retirement. It helps by providing a portion of your pre-retirement earnings each month. Its goal is to make your retirement comfortable and stress-free. The amount you receive each month will depend on when you decide to start receiving your benefits.
If you were born in 1960 or later, your full retirement age is 67, which means you’ll be eligible for the full amount of benefits you’ve earned. But don’t worry, you can start receiving benefits as early as age 62. Just keep in mind that starting early means your benefits will be reduced. Your benefits cap out at age 70, at which point there’s no reason to wait any longer. If your FRA (full retirement age) is 67, delaying until age 70 would add 24% to your benefit.
When you and your spouse both file for Social Security at full retirement age, each of you will receive at least half of the other’s benefit. For example, if one retiree is eligible for a monthly benefit of $2,000, their spouse will receive at least $1,000, even if their own benefit would be less.
How about claiming social security for a former spouse? At CKS Summit Group, we’re often asked if it’s possible to claim Social Security on an ex-spouse. The answer is yes, as long as you were married for ten years. And, you can even do it anonymously! See out our “Can I Really File for Social Security Benefits on an Ex-Spouse? “on Money Clips for more information.
Remember, Social Security is not meant to fund your retirement. And you should never rely on it for such.
If you’re like most people, you probably saved money in a retirement account during your working years. These accounts can be a lifesaver in retirement and provide you with essential income. Without them, retiring can be difficult. Retirement accounts let you invest in a variety of assets such as mutual funds and ETFs. When you turn 59½, you can withdraw money from your 401(k), 403(b), or IRA without facing any penalties or restrictions.
A 401(k) plan is a retirement savings plan offered by American employers that has tax advantages to the saver. One of the best things about having this specific account is that the contribution limits increased. This means you can now put up to $1,000 more into your 401k retirement savings than before!
Another plan that is incredibly beneficial to have is a Roth IRA. Unlike traditional IRA accounts, contributions to a Roth IRA are made with after-tax dollars, meaning you won’t face any tax penalties when you withdraw the money in retirement. This can provide a significant advantage, especially if you expect your tax rate to increase in the future.
Additionally, a Roth IRA allows for tax-free and penalty-free withdrawals at any time, providing you with greater flexibility and control over your retirement savings. With a Roth IRA, you can enjoy peace of mind knowing your hard-earned money is growing tax-free and accessible whenever you need it.
Investing for retirement is crucial to ensure you have enough income to support yourself through out retirement. When you’re working, your income is likely to be your main source of financial stability. However, once you retire, your income may be limited to Social Security, pension benefits, and any other retirement savings you have. Without adequate savings, you may struggle to make ends meet and pay for essential expenses such as housing, food, and healthcare.
Investing your money early on in your working years allows it to grow over time and can help you build a substantial nest egg. This can provide a reliable source of income during retirement and help you maintain your standard of living. The power of compound interest and the benefits of long-term investing can play a significant role in the growth of your retirement savings.
There are several investment options available to choose from such as:
- Stocks
- Bonds
- Mutual funds
- Exchange-traded funds (ETFs)
By diversifying your investments and allocating assets based on your goals, you can help maximize your returns and reduce your risk. A financial advisor can be helpful in creating a retirement investment plan that suits your needs and ensures you are on track to meet your retirement goals.
Working longer is becoming an increasingly popular choice for many retirees as a way to have more funds for retirement. By staying in the workforce for a few extra years, individuals have the opportunity to save more, pay off debt, and build their retirement nest egg. Additionally, working longer can also increase the amount of Social Security benefits you receive, as you are credited for additional years of earnings.
However, working longer may not always be a feasible option for everyone, especially if you have health issues or if your job is physically demanding. It is important to consider your personal circumstances and carefully weigh the benefits and drawbacks of working longer.
When it comes to retirement, working with a financial advisor for your financial needs is a smart choice. Financial advisors can help you create a personalized retirement plan that suits your unique goals and needs.
At CKS Summit Group, you can rest assured knowing our advisors will help you make informed decisions about your retirement savings and investments. Our focus is to bring you fresh new ideas for your retirement income. Our cutting edge tactical portfolios help our clients achieve safe, healthy growth of their savings and preservation of their principal balance.
