5 Unexpected Sources of Retirement Income | Smart Change: Personal Finance | magicvalley.com – Times-News

Here’s a majority you don’t want to be in: Most people have not saved enough for retirement. According to the 2022 Retirement Confidence Survey, only 33% of workers have saved $250,000 or more for retirement, meaning that 67% have not. (Indeed, 19% have saved less than $1,000.)

If you’re way behind in your saving and are hoping to squeak by in retirement with Social Security income, know that the average monthly Social Security retirement benefit was recently just $1,673, or only about $20,000 annually. Clearly, you will need some other sources of retirement income. Here are seven, some that require having some money to spend and some that don’t

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1. Interest

This source of income has been close to useless for many years, as we have gone through a long period with ultra-low interest rates. Not anymore, though — they have been climbing. If you have $20,000 in the bank and are earning, say, 2% on it, that’s only $400 per year. But when interest rates are higher and you’re earning, say, 7%, that principal can deliver $1,400.

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2. A part-time job

Here’s an obvious way to generate more income in retirement: work. You may not be eager to do so, but a little brainstorming and exploration might turn up some appealing part-time jobs or side gigs. As a bonus, they can keep you from getting bored or feeling aimless and even depressed in retirement. If you work, say, 12 hours a week and earn $15 per hour, you can collect about $780 per month (more than $9,000 per year), pre-tax.

3. A fixed annuity

If you have a significant chunk of change as you approach or enter retirement, you might convert some or all of it into very dependable income by buying an annuity. In general, fixed annuities are simpler and arguably preferable to variable or indexed annuities, but read up on annuities before buying one, anyway. You can get annuities that start paying you every month for life, starting immediately or starting in the future.

Here’s an idea of the kind of income you may be able to buy via an annuity these days:

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Source: https://magicvalley.com/business/investment/personal-finance/5-unexpected-sources-of-retirement-income/article_ba3d397c-a869-5e8f-8b58-c9ee654a4cec.html

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Person/People

Cost

Monthly Income

Annual Income Equivalent

65-year-old man

$100,000

$600

$7,200

65-year-old woman

$100,000