Today’s Prep:
When you retire, it’s important to set up several sources of income, particularly predictable income. What are some forms of reliable income and what streams of income are more vulnerable? We’ll explore the options and help you determine if they might work for you.
Equipping Points:
Once you retire, you no longer have a regular paycheck from a job. So, what will your sources of income be? There are a number of sources of retirement income people feel are reliable and consistent, but are they? On this episode of the Retirement Ready podcast, Eric talks through various possible income streams to help you determine which ones are worth having in your retirement plan.
People think that rental income is one dependable source of income. But what happens when your tenants can’t pay rent one month? Or the property goes unoccupied for months between tenants? Relying on other people for your income is not always as reliable as you might like it to be.
Are variable annuities worth pursuing? This is another source of retirement income people use to create a personal pension of sorts. While the income is guaranteed, the value is not guaranteed. Not to mention, do you know what kinds of fees you are paying?
What about bonds? When you look at individual bonds, what are the pros and cons? Any time you give money to someone or something with the promise to get money back in return, that promise is only as reliable as the person you are lending money to. Do you trust the sources of the bonds? Make sure you understand what kind of bond you are buying.
Is there such thing as a guaranteed income stream in retirement? The two guaranteed incomes are Social Security and pensions. But really, there are only two guarantees in life no matter what–death and taxes. These sources of income are therefore a lot of more guaranteed than something more volatile like the stock market. Ask, how much of your income in retirement do you want from predictable and guaranteed sources?
Listen to the full episode or click ahead to a certain segment using the timestamps below.
0:46 – What are retirement income sources people assume are predictable?
2:04 – Are variable annuities a worthwhile retirement income?
4:17 – Should you use bonds to create retirement income?
5:51 – Is there really such as thing as guaranteed income?
8:12 – Right now, coronavirus is highlighting some of the gaps in guaranteed retirement income.
Related Resources:
What’s The Difference Between These Important Financial Terms?
Life Happens: How Will Your Financial Plan Be Impacted?
Stages Leading Up To Retirement
Today’s Takeaway:
[spp-tweet tweet= “Rental income is relying on other people to provide you the income you need, and sometimes those peoples’ lives change just like your life may change. –Eric Peterson“]
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