4 Surprising Sources of Retirement Income
It's scary to stop earning income when you stop working, but everyone dreams of a comfortable retirement, so it's a bridge you'll have to cross eventually. Popular sources of retirement income, such as Social Security and retirement accounts, might be enough to cover bills for most investors, but there are several alternative cash flow opportunities that are often overlooked or underused. These four surprising sources of retirement income are less common for good reasons, but they might be worth considering if you've already exhausted the traditional ways to enhance your retirement lifestyle.
Most Americans are entitled to Social Security benefits. The amount received under this program varies with age, lifetime contributions, and the year you start taking payments, but the average retiree is paid over $18,000 annually. Defined benefit plans, such as pensions, are also common for many professions. These pay a guaranteed monthly income for life, but they have become less popular in recent times as they've become harder to manage.
401(k), IRAs, and other qualified retirement accounts were introduced by the IRS to fill the gap left by dwindling pension participation. These encourage investment to build retirement savings, and roughly 75% of working people have some sort of retirement account. Along with investments in regular brokerage accounts, these assets can produce investment income and act as a source of funds in retirement. Additionally, many people have elected to move assets into annuity contracts, in which an insurance company agrees to pay the account holder each month for either a specified number of years or the lifetime of the holder.
Source Fool.com
