increase your income
(and your peace of mind)
For most of us, retirement can generate many conflicting emotions. Fear need not be one of them. With the right money management, you can augment your cash flow, build up savings, and ensure a more comfortable Golden Age.
Extend your earning years
Staying at your job for a few more years can certainly increase your assets and your opportunity to max out retirement accounts. But even if you’ve already retired or begun receiving Social Security benefits, a new full or part-time job can be a good option for you.
Many opportunities exist, reports an Urban Institute analysis of Health and Retirement Study data. The most popular ones include:
- Teacher, college instructor or management consultant
- Home health care aide, childcare, pet sitter
- Real estate agent or property manager
- Sales, cashier, manufacturers’ rep
- Taxi or Uber driver, delivery worker, chauffeur
- Seasonal tax preparer
Online job search tools
Lots of websites specialize in jobs for mature and experienced workers. Here are a few to get you started: WhatsNext.com, RetiredBrains.com, YourEncore.com, and Seniors4Hire.org. Find help with job training, counseling and networking with the AARP Foundation’s Back to Work 50+ program. And the National Council on Aging’s JobSource tool is designed to help older adults assess their interests and skill areas, find training and look for job openings.
If you are 55+, and have little or no income, the Senior Community Service Employment Program may be able to help. SCSEP trains older adults, then places them into part-time community service jobs that in most cases can lead to full-time work. The program, which is funded by the US Department of Labor, serves practically every county in the country. Get more info at here.
Access your home’s equity
Do you own your home? If so, tapping into its equity can provide income. Here are three ways to do it:
- Home equity loan, or second mortgage, delivers a lump sum of money. It comes with a fixed repayment schedule. It is a good option if you are undertaking a home improvement project or want to consolidate debt.
- Home equity line of credit enables you to make withdrawals when you need extra cash. You only pay interest on the amount you borrow. It can be a “just-in-case” safety net fund to pay for large purchases or unexpected expenses.
- Reverse mortgage is a loan in which the lender pays you, using the equity you’ve built in your home. You are not required to make any payments. Instead, the entire loan amount must be repaid when you sell your home or pass away.
Is a reverse mortgage right for you?
For most of us, a home is the largest financial asset we have. Downsizing is typically the way older adults access the equity they’ve built up. But for those who do not want to leave their home, yet still want to create an income stream, a reverse mortgage might be a good choice. You are able to receive funds as a lump sum, in regular payments each month, or as a line of credit. Although you do not pay back these withdrawals, equity is being removed, which decreases the home’s value to your heirs. Also, there are substantial upfront costs and fees. Though many companies offer reverse mortgages, the only one insured by the Federal Government is the Home Equity Conversion Mortgage (HECM). Their booklet, Use Your Home to Stay at Home, offers unbiased information. You can find important information about costs, reverse mortgage counseling, plus pros and cons, on their website.
Set up an ABC retirement budget
Making the most of your money goes hand-in-hand with maximizing income. This simple budget will give you a clear picture of your finances, plus a firm handle on cash flow.
A: List all your expenses into three buckets: essential monthly expenses (rent, utilities, association dues), nonessential monthly expenses (gym membership, cable, holiday gifts, vacation), and essential yearly expenses (property tax, insurance).
B: Create a 12-month table, and place each expense in the month in which it’s paid. For example, if you pay your homeowner’s insurance in April, it goes there; holiday gift-buying would probably go in November and December; a vacation might be July.
C: Add up your total expenses and total income for the year. Then compare the two:
- If your expenses are equal to/greater than your income, look to your nonessential list and make adjustments.
- If your income is much greater than your expenses, you may want to add a few lifestyle luxuries. Better still, save it.