Plan For Income From Several Sources

Plan For Income From Several Sources

When Franklin Roosevelt signed Social Security into law as part of
the New Deal in 1935, it was never designed to be anyone’s sole means of support
in retirement. Strengthen your finances in retirement by developing additional
sources of income to add to your Social Security.  Here’s how:

• Keep working. —  Unless you’ve got a well-padded bank account,
keep your job, or consider going back to work, even if you’ve already started
benefits.  We’re living longer, and Social Security benefits alone, even with
annual Cost-of-Living Adjustments (COLAs), simply won’t be enough to provide an
adequate income, especially if you live to your 80’s or 90’s.

By working longer, you may have access to employer-provided health
benefits.  If you’re in a high-earning year, your earnings may help boost your
retirement benefits later on when you stop working.  If you’ve delayed starting
benefits, your initial benefit amount will be 25% higher at your full
retirement age  than at age 62.  Delay even more and it will be boosted by the
delayed retirement  credit which is 8.0% per year until age 70 (if you reached
age 65 in 2008 or later).

• Develop a second career or sideline income — Turn your passion
or favorite hobby into a sideline business, or offer your expertise as a
consultant, or free -lancer or independent contractor.  Check with your local
Chamber of Commerce or area community college to learn about programs that can
match you up with business mentors or help you brush up on skills like using a
computer, or running a successful business.

• Squeeze your home for cash — If your home can be divided into
two separate apartments, consider renting a portion of your home, or following a
Depression-era tradition, take a roomer.  If you live alone, consider taking a
housemate with whom you can share expenses.  Some couples living in older homes
in vacation spots have turned them into a bed and breakfast, a full-time

• Keep retirement accounts invested in age appropriate choices.
If you own stocks in a retirement account, make sure the company holding your
investment portfolio knows your age and your upcoming income needs.  You may
need to re-evaluate how your money is invested and your need for dividend or
bond income.  If you haven’t already done so, you will also need to discuss when
you need to start distributions.  Most types of retirement accounts other than
ROTH IRAs require that you take distributions by age 70 and a half or pay a
punitive tax penalty.