THREE SOURCES OF RETIREMENT INCOME
July 7, 2020 - Douglas Myser
Three sources of retirement income. Retirement is expensive and becoming more so all the time. Meanwhile, fewer jobs are offering pensions to help cover retirement costs, and some are even cancelling 401(k) matching temporarily due to the strain this latest recession places on their finances. Some workers are also struggling to set aside money for their futures right now, and that can amplify concerns about financial security in retirement. If your low 401(k) balance triggers anxiety every time you look at it, I have good news. You may be able to count on income form some unexpected sources in retirement to help you cover the difference between what you've saved on your own and what you need. These three ideas might help. Three sources of retirement income.
Health savings account. You're probably familiar with health savings accounts or HSAs, if you have a high-deductible health insurance plan--one with a deductible of at least $1400 for an individual or $2800 for a family. Money you put into this account reduces your taxable income this year, and if you use the money for medical expenses you won't owe any taxes on it at all. What most people don't realize is that it's also a great place to stash you retirement savings. In 2020, individuals may set aside up to $3550 in a HSA and families can put in $7100.
A side hustle. Working a side hustle may not feel like retirement to some people, but there are so many different ways to earn extra cash these days and many don't require that much effort. Think about what interest you have and try to align them up with a creative way to do something you enjoy and earn extra cash while doing it.
Social Security. Some people may not think that Social Security belongs on this list, and many people think it will not be there to pay out benefits. The latest Trustee Report for Social Security indicates that it has solvency thru 2035, without any changes at all.