With the cost of living these days, it is not enough to create a retirement fund. Creating cash flow is important to make sure you have money available when you need it. The future is unpredictable and the sooner you look at your options, the smoother you can expect your retirement to be. Here are some ways to back up your savings and have reliable income during your retirement.
- Create a Social Security claiming strategy.
Social Security is a good start. It is guaranteed monthly income that grows with inflation without you having to take risks. But to maximize this cash, you want to develop a claiming strategy.
Ideally, it is best not to take it at the earliest age possible, which is 62. This will permanently reduce your monthly benefit. On the other hand, waiting until you are 70 will ensure you get the maximum monthly payout.
Of course, in some cases it is not wise to wait too long. Weigh your situation and find a good middle ground to see what is best for you.
- Set up a bond ladder.
Bond laddering is simply dividing investments in bonds and staggering it across different time frames so you can receive a range of interest rates while creating predictable income. As your bond matures, examine the yields and reinvest it accordingly.
- Consider a reverse mortgage.
In simple terms, this is a mortgage where you are borrowing money and using your home as security. There are several ways to do this: you can take monthly payments, a lump sum, or a line of credit. You do not have to repay the loan until you leave the home. If you die, the house will be sold to settle the loan. Reverse mortgages are not a one-size-fit-all strategy though, especially if you plant to leave your home to family.
- Keep working.
If you can, seek employment and continue working if you have the time, energy, and interest. It does not have to be a full-time job, just something on the side to keep you active and give you extra money.