4 Tips for Ensuring Financial Security As You Retire
Retirement is often an exciting time for so many reasons. If you work a particularly stressful job, or one you don't like, you'll likely be ecstatic simply to be rid of it. Even if you enjoy your work, retirement still offers plenty of benefits when you're ready. You'll finally have complete control over your time, for one thing. This gives you the opportunity to more freely pursue your hobbies or even develop new ones. This freedom is also an opportunity to enjoy social life more or travel if you still have some destinations on your bucket list. Of course, you won't be able to do much if you aren't financially secure.
There's a commonly held belief in the U.S. that most citizens today aren't ready for retirement. This belief is often used to argue that retirees used to be better off, but this isn't really the case. Employer benefit pensions never covered the majority of citizens, and today over 50% of United States citizens have a defined benefit plan for retirement, such as a 401k. Naturally, saving for retirement as early as possible is the best way to make sure you're ready when the time comes.
Everyone will have different goals for their ideal retirement—after all, no one knows what you want better than you. Many experts recommend investing 15% of your income into your retirement account. This means investing up to your employer's 401k match (if applicable) and opening up a Roth IRA. Essentially, a Roth IRA lets you pay taxes on your money as you put it into the account, and all future withdrawals will be tax-free. Since taxes are always likely to be higher far in the future, this can be incredibly beneficial over time.
Of course, saving is only part of the equation. You also need to be smart as you approach retirement and even after you've retired. Here are a few tips to secure your finances as you retire.
Cut down your bills
Saying to watch your spending is an obvious tip, but it's one that's always worth bringing up. Once you're retired, you have less money coming in, but you've been freed up in all kinds of ways to spend it. Overspending can quickly and easily become a big problem, so it's important to reduce it where you can.
One way to do that is to look around for better deals on your monthly bills at least once a year. You may have signed on for a great deal with your internet company, for example, but it's common to become "grandfathered in" to a standard rate once you've been with them for a while. Fortunately, there are plenty of online resources to help you cut back on spending.
Take this site that compares electricity suppliers in Northern Ireland, for example. It lets residents compare rates from Northern Ireland electricity providers by simply inputting their email address. They also help Northern Ireland residents switch to a new service provider as easily as possible with no interruption to their service. Be on the lookout for sites like this that can help you with all your bills.
Find another source of income.
You don't have to work a standard nine to five job to make money. Some seniors decide to get part-time jobs, or to even start businesses out of their homes, in order to keep occupied and make some additional money. If that sounds like too much work, there are plenty of passive income ideas you can pursue.
Renting out an extra room, or even a "granny flat," is a common option. Particularly if you live in a city, there are plenty of people who just need a private place to stay without needing to chat with landlords. If you're an expert in your field, or even just good at a particular hobby, it's easier than ever to set up an online course to teach others. Hosting sites even provide templates these days, so you really don't need any kind of web design experience. This one is also a great way to stay active yourself and to find like-minded people.
Consider alternative investments.
Pretty much everyone knows about investing in the stock market and buying mutual funds and bonds. There's certainly nothing wrong with working with a broker and pursuing traditional investments, but they're hardly the only options. Alternative investments, such as real estate, can be extremely lucrative, and they're not as difficult to pursue as you may think.
For example, a real estate investment trust (REIT) is a company that pools money from multiple investors and lets them earn dividends on real estate investments. This is a great way to find investment opportunities without actually owning property yourself. This type of investment can work for apartment complexes, commercial properties, and even infrastructure.
Of course, it's always important to do your due diligence when looking for alternative assets or financial institutions. That's where Yieldstreet can help. Yieldstreet is an expert alternative investing platform that offers opportunities in real estate, finance litigation loans, marine vessel acquisition, and much more. If you're unfamiliar with alternative assets, you may be wondering is Yieldstreet safe? The answer is yes, and you can check Yieldstreet reviews to see how Yieldstreet has helped all kinds of investors find accredited offers.
Look into life and viatical settlements.
If you have a life insurance policy that you no longer need, that can be an excellent source of income. You can find a broker to pursue a life settlement, which is where a third party purchases your life insurance and takes overpaying the monthly premium in exchange for receiving the policy's death benefit after your passing. You may decide to sell a life insurance policy if your beneficiaries no longer depend on it or if you're about to face a possible loss of coverage.
The history of life settlements can be traced to the court case of Grigsby vs. Russell. In this 1911 Supreme Court case, it was determined that Dr. Grigsby could indeed accept the life insurance policy of the insured as payment for a procedure because life insurance is personal property and may be sold as such. Life settlements would eventually inspire the viatical settlement industry, which became popular during the AIDS epidemic when patients with AIDS would sell their life insurance policies to afford life-extending treatments.
Viatical settlements are specific kinds of life settlements offered only to those with a terminal or chronic illness. Typically, viatical settlement contracts are offered to those with low life expectancies—between two and four years. Viatical settlement transactions have some benefits over typical life settlements. The big is is that viatical settlements are tax-free, and the money can be used for anything of your choosing. Viatical settlements are often used to improve the quality of life for the viator through treatments and care, the money can also be used for travel, pursuing dreams with the time you have left, passing inheritance to loved ones, or anything else.
The amount of money the viator receives will be less than the death benefit of the life insurance policy but more than the plan's cash surrender value. Typically, the application process is simple, as is determining a viator's eligibility, and a viatical settlement transaction can be completed in just a few business days. You may want to work with a viatical settlement broker in order to find the viatical settlement provider who will offer the best deal.
Preparing for retirement is rarely easy, but the good news is that with these tips you can secure your finances no matter your health status.
