Are you looking to earn some extra cash as a retiree? Or are you just trying to find better ways to manage your benefits and spending? Whatever your situation, having retirement income solutions prepared at the end of your career will give you the upper hand.

CNBC recently reported that Americans will need $1.7 million, on average, to retire. This isn’t possible for many families across the country. Therefore, it’s becoming more common for retirees to find other sources of income, while also managing their benefits and finding the best tax rates.

 

Finding the best retirement income solutions in 2020

What are the Best Retirement Income Solutions Today?

In some cases, the best solution to having financial freedom in retirement is money management. Understanding your benefits, such as Social Security and Medicare, is always a great place to start. However, there are a variety of ways to make the most of your retirement funds:

  • Find a part-time job that you enjoy.
  • Buy an annuity.
  • Minimize your taxes.
  • Receive income through investments.

Some people will rely on these alternative forms of income to survive, while others will use them for other reasons. You may want a part-time job to remain active in your community or keep from getting bored. Others have a passion for the stock market that drives them to invest. No matter why you are looking for retirement income solutions, these are surefire ways to maintain financial stability.

Take on a Part-Time Job

Part-time work is one of the most common ways retirees gain further income, and who can blame them? The benefits go far beyond your finances. Not only are you putting more money in your pocket, but you’re also keeping your mind and body active.

CNBC reported that more than half (54.7%) of people ages 60 to 64 were working part-time. Additionally, 31.2% of people between the ages of 65 and 69 were holding part-time jobs.

While a part-time role is a great way to earn extra income, there are a few key points to consider. If you begin receiving Social Security before your full retirement age, any part-time earnings over $17,040 will reduce your benefits temporarily. Also, any extra income can potentially trigger surcharges for individuals on Medicare Parts B or D.

It is also important to note that you will receive full Social Security benefits if you retire at 66 or 67.

Buy An Annuity

You can create your own guaranteed source of income well before you retire. Buying annuities is an option that many people consider in their 50s and 60s.

There are two common types of annuities – deferred-income annuities and immediate fixed annuities. The latter is more popular and can give you more financial protection.

When you buy a deferred-income annuity, you won’t begin to receive payments for several years – possibly even 10 years or more. However, if you pass away before the payments begin, you will get nothing. The longer you wait to receive payments, the more money you will receive. Some deferred-income annuities allow you to opt for return of premium or survivor benefits.

An immediate fixed annuity is quite different. You pay an insurance company a lump sum in exchange for a monthly check over a predetermined amount of time. You can also purchase survivor benefits, which provide payments to your spouse or other beneficiary after your passing.

Minimize Your Taxes in Retirement

The best way to minimize your taxes is to consider your retirement location. Some states are extremely tax-friendly for retirees. Considering retiring in Florida, Georgia or South Carolina.

Florida has beautiful beaches and tons of entertainment value. The Sunshine State also has low property taxes and no income tax at all. Georgia’s property taxes are even lower than Florida’s, but the state enforces income taxes between 1% and 6%.

South Carolina has many generous retirement income tax exclusions and very low property tax. A retiree in South Carolina will only pay $601 per $100,000 in home value, according to Business Insider.

Extra Income by Investing in the Stock Market

The stock market is the most lucrative investment opportunity for retirees. There are so many great ways to make money in stocks, such as growth investing, value investing and dividend investing. These types of strategies can become complicated very quickly, so it’s important to align yourself with experts in the field.