During our working years, most make an effort to put some money away with the hopes of someday being able to retire. And while you may think you’re putting away enough, often times savings alone is not enough to support a full retirement. It’s almost imperative to have a strategy for making money in retirement.
Many hopeful retirees are looking to relax in retirement and remove stressors. For some that means stress about earning retirement income too. Who doesn’t want to earn money while doing something else, like travelling? Here’s a look at a few passive income ideas from a recent Newswire article.
Real estate is a very popular passive income vehicle. A rental property allows you to put your money in an appreciating asset while generating a steady income from monthly rental payments from tenants. This strategy isn’t always considered passive however. If you manage the property yourself, there could be late-night emergency phone calls and weekend repair jobs. That’s why some opt for hiring a property management company to handle all issues. This can be a great set-up if you have long-term tenants and the numbers make sense. Afterall, paying a property manager means less return for you.
Contrary to popular belief, once you retire, you shouldn’t necessarily stop investing in the stock market. Dividend stocks have the potential to generate capital gains and can help generate a small amount of income. Keep in mind, dividend payments can be reduced or stopped at any time if the company doesn’t perform well. Therefore, it’s smart to spread yourself out over multiple dividend stocks to curb risk. With the right combination, your portfolio can grow while receiving monthly, quarterly, or annual payments to offset some living expenses.
An annuity is a contract that you can purchase from an insurance company with a lump sum amount. Over the years, your money earns interest, and at some predetermined future date, you’ll start receiving monthly payments for the rest of your life. These financial products make the most sense if you expect to live a long life and have enough time to earn back your initial lump sum. There are several different kinds of annuities, and it’s important that you carefully research each one and how they might work for you. Under the right circumstances, annuities can be a fantastic way to earn incremental income without lifting a finger.
Bringing in $2,000 a month in passive income may not seem like much when compared with your full salary from your working years. But consider this: if your retirement lasts for 30 years, your $2,000 a month adds up to approximately $720,000. It really adds up. That’s money you don’t have to pull from your retirement account, and can instead use it for long term care or as an inheritable estate. Talk to a trusted financial advisor today, and find out how you can make passive income work for you in retirement.
Written by Rachel Summit