Have you realized that saving up a big lump sum for retirement might not be enough to sustain you during your senior years? You’re not alone in worrying about your retirement savings, but setting up a recurring “paycheck” in retirement can help. You can meet with one of our financial advisors at Maggi Tax to set up a plan and receive steady income when that time comes. For now, check out this article for a better idea of how this method works:
Why Do I Need to Think About “Paychecks” In Retirement?
It’s important to save up money for retirement, there’s no doubt about that. But while every bit helps, the cost of living is always changing and you can’t accurately predict your medical expenses that far into the future. You might think that Social Security is there to pick up the slack, but that alone also might not be enough to sustain you during your retirement years. You need an extra boost to your funding, and setting up paychecks in retirement can help better sustain you when you need it.
Here are some effective ways to build a steady income during retirement:
1. Maximize Your Social Security Benefits
While you’re basically guaranteed to receive social security when you retire, there are ways to increase the amount that you get. An easy way to do so is by delaying your withdrawals as long as you can until you reach age 70. When you jump the gun and start pulling at the earliest retirement age of 62, you will be receiving the minimum amount of social security. Each year you wait, the more you will be increasing the percentage that you receive. Maximizing your social security benefit is placed at the top of our list because this benefit is guaranteed with minimal risk. You may even qualify for additional social security benefits like those reserved for surviving spouses.
2. Set Up An Annuity
Investing part of your funding into an annuity gives back a certain percentage depending on your savings. This is another way to guarantee a steady flow of income while you’re in retirement. This route requires you to get in touch with the right insurance company before you enter retirement. And like a pension, your investments can turn into future, steady paychecks.
3. Consider Pension Plans
When you fund a pension program, all investors make contributions to a communal account that is distributed to those in retirement. Whether you contribute with stocks, bonds, or even cash, a single company keeps track of the collection and gets back to you with steady paychecks when you enter retirement. This is just another way to ensure that you receive regular income when you are no longer working.
4. Be Smart With Your RMDs
Many retirement accounts require you to withdraw a certain amount when you reach a specific age. If you’re not ready to withdraw but are being forced to, you could take your RMD (required minimum distribution) and redirect it to another savings method even if it’s just your bank account to use at a later time. RMDs are required for tax-deferred accounts like Roth IRAs, but what you do with that money can be put towards your retirement “paycheck” plan.
Consult Maggi Tax Today to Start Setting Up Your Retirement Paychecks!
There are plenty of ways to secure a steady paycheck in retirement, and Maggi Tax can help you get started! Call us today at (727) 799-1701 to schedule a consultation appointment for our income planning services for retirement!
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