Growing old is one of the things that every individual has to think about. There are lots of people who never really give retirement plan ideas some careful thought.
However, if they would want a little more for themselves to enjoy, they have to think of ways how they will be able to sustain the kind of lifestyle that they would want to have in the future.
Those who are still young have the time to prepare well for their retirement but for those who are near this age can still make some good investments that will augment their income later when they have to leave work or to lessen their workload. People should not rely on their social security benefits when they grow old as it would not really be enough for their needs especially if they get sick.
Here are some of the great retirement plan ideas that people can think about:
• Savings Investments
One of the best ways that young people have to think about is to save as much money as they can. However, in order to achieve this, they need to discipline themselves in order to build their investment portfolio from their savings. Individuals need to consider their age, their income, and their life expectancy so that they would know how much of their present income should be set aside for their savings investment.
For people to make this as one of the great retirement plan ideas that they can consider, they will have to see to it that they do not withdraw from their savings whenever they need some money. They have to stay firm not to take the money that they are setting aside for their retirement.
They can also check what their banks are offering when it comes to long-term investments. Other than maintaining a savings account, there are other possible investment opportunities that banks may be offering like time deposits where the savings may earn more interest while it sits in the bank for several years.
• Cultivating Multiple Income Streams
Having several income-generating investments in the future is also one of the great retirement plan ideas for people who would like to enjoy financial security in their old age. It is also necessary for people to be able to pay off their debts and mortgage amortizations if there are any so that they can save enough money that they can put into several types of investment.
People can also save more if they do not have so many obligations. It is advisable that they get rid of the financial obligations by paying it off the soonest possible time. While they can consider getting their retirement benefit from their social security at an earlier date, they need to think of other possible income that can provide additional income. Cultivating several income streams is possible if people know how and where to invest their money at the least risk possible.
Those who have sufficient money to invest in properties that they can have rented in the future can derive a steady income later. At least their investment is secured and they can always opt to sell the property when needed.
• Financial Instruments
Some people may consider other retirement plan ideas such as government bonds and treasury bills as well as other financial instruments that are offered by banks. Although these may yield a little lower interest these are secured investments. People can make risky investments with higher yields of profit but those who would like to secure their future will unlikely decide to follow this direction. It would be wiser to get smaller amounts in terms of interest rates through secured financial instruments.
• Sponsored Plans by Employers
Aside from the individual retirement accounts that people usually start when they work, other retirement plan ideas may include sponsored plans. Employers and employees both contribute to a mutual fund where money may be invested in company stocks. Business owners may also offer profit sharing plans to their employees. The employers may give a specified amount in terms of profit for their employees which would, in turn, become their contribution which can later be used as money for their retirement.
Before deciding on any of the plan or on any of the types of investments that are available, people will have to think about the long-term benefit that they can gain. Though more secure forms of investments do not really bring in a lot of returns; nevertheless, people can expect something in the future.
There are still other types of investments that people can consider. These may be great retirement plan ideas but there are also some factors that they need to consider. Not all people are qualified to invest in plans. They have to check if they are able to meet the eligibility requirements before they think of it as an option.
People also need to think of the taxes as well as the other costs involved. They need to think about mutual funds being invested in company stocks because there is always a risk of losing some profits because of various market conditions. They also have to think of their age as well. Younger individuals may take greater risks in their investments as they still have the time to recover financially over a period of time. Older individuals have to be very careful with their investments as they would need the returns from their money in a shorter period of time.
Whatever people choose from the retirement plan ideas as the best one for them, what is important is that they are able to prepare for a comfortable life in the future. What they need is to be able to maximize their income but at the same time to decrease if not to totally eliminate the number of risks that they are taking.
Planning would be a key factor when deciding how they will obtain the life that they dream of in the future. They also need to set a goal that is realistic given their financial capabilities at present.
- Sources of Retirement Income
To most people, their present jobs are their main source of income. However, once they stop, they can still have some forms of retirement income that would let them live comfortably. Those who have planned and have saved well may be able to realize their dreams of spending the best of their time doing leisurely things. Individuals have to start thinking of possible ways of earning income after they leave work.
People need to have about 70% of their previous income for the past years as their retirement income so that they can really enjoy being retired. They also have to see to it that their provisions would last them the rest of their lifetime. Though people can put their money into their bank accounts, they can think of other forms of investments that will bring them more income than the interest rates in banks.
However, they have to see to it that they have all the necessary information about the investment that they are going to make. Seeking financial experts to help them out may be better than just putting their money into some investment opportunities that they do not fully understand. People who would just like to sit back and relax when they retire have to work for it while they are still young. They have to plan their investments to make sure that they will have something for them in the future.
- Social Security benefits
Most people rely on their Social Security benefits as their major retirement income. They may be able to get at least half of their benefit in the lump sum and the other half as monthly pensions. The funds that people may derive from this source may depend on their contributions and they may be able to get it when they reach a certain age. The amount that people will be receiving in the future may not be enough for them to live comfortably. Making other investments will augment this type of income for retirees in order for them to enjoy better living conditions as they grow old.
- Pension Plans
People can also invest in private pension plans as another source for their retirement income. They may be able to enjoy being retired if they have more than enough funds to cover their basic needs and some money to spare on other leisure activities. People can take advantage of offers from their employers such as company retirement funds. They may be required to render a number of years in order to enjoy such benefit from the company. Pension plans, employer’s retirement plans or other types of retirement plans are good sources of retirement income in the future.
- Part-time jobs or Self-employment
There are some people who still work after the age of retirement. This could be one of the best sources of retirement income for them. Other people may also continue to be employed for part-time jobs. There are some other advantages of working after 65 years old. Aside from a continuing income for older people, working may help in maintaining their emotional and psychological well being too. They still find themselves useful and active to earn for themselves and for the things that they would like to enjoy in life.
This may not be a source of retirement income for everybody. Only some retirees may enjoy the wealth that may be given to them as their inheritance. However, in case their benefactor live longer than expected, then they will still have to wait until they are able to make use of their inheritance to generate the additional income that they need. People are cautioned not to put too much hope in assets that they may inherit as this can be changed by their benefactor depending on circumstances and on their financial needs.
People may also invest in insurance policies so that they may have another source of retirement income for their old age. However, they will have to understand all provisions that are indicated in the policies especially those that are written in fine print. They may consult a financial expert so that they would fully benefit from their insurance policy. People may be able to make use of their benefits from their insurance provided that they have selected a suitable plan that would meet their needs.
- Royalty payments
People who have patents, copyrights or trademarks can make use of their royalty payments as their other sources of retirement income. However, this may also be applicable to some people with inventions, ideas and other materials that they have created through their own talent and skills. At least this can be one of the income streams that will last them a lifetime.
- Income from rent
People who own property may also use it as part of their retirement income all throughout their lives. Income from rent may not be that steady especially during a lean season but people can earn from it as long as they have their properties. At least people can always opt to put it on sale if the real estate business in their area is doing well. Those who are still young and who would like to invest in property have to consider the location and the marketability of their real properties after a few decades.
- Income-generating assets
At least half of the people in their senior years have invested in income-generating assets such as treasury notes, bonds, certificates of deposit, IRAs as well as savings or checking accounts that give them interest. They are able to receive some dividends from their stocks or from their investments in mutual funds. However, this may not bring big returns that would suffice for all of their needs but it is still one of the most secure types of investments for their retirement income.
These are some of the ways how people can put up retirement income streams. However, they have to be aware of market conditions as it may affect the type of investment that they would like to choose. They have to learn the value of diversifying as it can help them get through when some economic problems which are beyond their control occur.