Top Sources of Retirement Income

Working Americans typically have one major source of income: their job. However, upon retirement, individuals may rely on several different sources of income to sustain their lifestyle. Here are seven different ways that current retirees are making their money:

1. Retirement accounts. A well-funded IRA or 401(k) account should make up a significant portion of your retirement fund. The earlier you open an account and start saving, the bigger your nest egg will be when it’s time to retire.

2. Social security. Social security is currently the largest source of retirement income, with more than 88% of retirees receiving steady payments. While baby boomers can rely on Social Security for now, funds may be depleted for future generations.

3. Pension. More than one-third of current retirees get a pension income, however this number is likely to drop in the future. Fewer companies are offering pension programs to new workers, and those who do are yielding smaller payouts.

4. Savings Accounts & CDs. Also known as “time deposits”, CDs require investors to deposit their money for a predetermined length of time while it earns interest. If you have the funds to spare, keeping some of your capital tied up in CDs is a good, safe way to earn additional money.

5. Home Equity. If you have a lot of equity built up in your home, you can use it to help fund your retirement by using a reverse mortgage or by downsizing and pocketing the extra cash.

6. Stocks & Annuities. According to U.S. News, only 20% of workers think stocks will provide a significant amount of their retirement income. Even fewer are utilizing annuities. Talk to your financial advisor about the benefits of these income sources.

7. Part-Time Work. Retiring from your career doesn’t necessarily mean you have to stop working altogether. Picking up a part-time job can give retirees a sense of fulfillment and an additional source of income.

If you are currently planning for retirement, you should be looking to utilize as many income sources as possible. Not sure where to begin? The financial advisors at American Investment Planners, LLC can help you craft a personalized, diversified retirement plan that meets your needs. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.