Home Budgeting 4 Unexpected Retirement Income Streams

4 Unexpected Retirement Income Streams

by Carter Taylor

For most people, retirement has two main income sources: social security and retirement savings. Some people still get their employer’s benefits, but there are few defined benefit pension schemes that have guaranteed income streams for today’s employees.

But these may not be the only places to get retirement income. In fact, there are four potential sources of unexpected income in your later years.

1. Working part-time

Some seniors will switch to part-time work after leaving their jobs. Although receiving income from retirement work is rare, even non-traditional occupations can make a major difference in retirement security. You might also find other ways to make money outside the pre-retirement jobs.

Although COVID-19 has increased the likelihood of some traditional side gigs, such as ride sharing services, there will still be alternatives open, including freelance writing, phone customer support, or even operating as a coronavirus contact tracer.

Also be aware that if you’re under full retirement age and work while receiving social security, you may temporarily lose some of your income — but in most cases you’ll eventually get that money back.

2. Your house

Your house will provide income in many ways. Of course, you could rent a room or your house to earn stable, regular income.

If you have an expensive home, you can also sell it downsize. If you can walk away with a lot of money from your sale, you can use some of the money to buy a more inexpensive place to pad your retirement accounts.

You may also take a reverse mortgage and get some of the equity off your home, but you need to weigh carefully the pros and cons of this strategy.

3. Government 

Many elderly retirees qualify for tax credits bringing more money into their pockets.

For example, retirees under 65 who have minimal income could theoretically apply for the Earned Income Tax Credit (EITC) as older retirees care for a eligible child such as a grandchild. Joe Biden also wants to make the EITC open to income-based workers 65 and older, even though they don’t have qualifying dependents. If elected and this move happens, several more seniors will be eligible.

The EITC is a refundable tax credit, so if you are already allowed to claim it or are entitled to do so if Biden becomes president, you may get more money back than you pay into the tax system.

Of course, government also provides retirees with other common benefits, including retirement from social security and survivor benefits. You should aim to optimize these conventional sources of income in addition to finding new ways to make some extra cash.

4. Your life insurance policy

If you have a life insurance policy which has a cash benefit, you can borrow against your policy or cash it in.

Although you will pay a tax for surrendering your policy — and you may leave loved ones without a death insurance protection — this is an opportunity if you want to get a lot of cash at once and spend it or use it for major retirement expenses.

Borrowing against your insurance is also a nice choice, since you can generally take a tax-free loan — but note that if you don’t pay back what you lent, the death benefit will be diminished.

Final Thoughts

If you’re like most Americans, your retirement savings are a few years (or longer). But a handful of undisclosed “Social Security Secrets” can help to boost your retirement income. For eg, one simple trick might cost you $16,728 more … Every year! If you’ve learned to maximize your social security income, we think you can retire comfortably with the peace of mind we’re seeking.

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