You have been contributing to your retirement for a while now, but you may have some questions, like:

  • Will you be able to enjoy the lifestyle you want?
  • Will your retirement funds last through all of the years of your retirement?

Your income doesn’t have to come from just one place. In fact, the strongest retirement strategies often include multiple income streams. It is wise to diversify your income streams to care for needs in the short and longer term. Plus, most people underestimate the cost of healthcare in retirement, and some overlook the need to keep some of their money in the market to keep up with inflation. Having multiple income streams is one way to navigate this.

Edelman Financial Engines suggest you need 80% of your working income when you retire. That is because taxes are lower, and you are not contributing to your retirement plan anymore.1 A benefit of being an Eder Retirement Plan member is that we’ll help you think through the options you have to find the right combination that will allow you to live comfortably, achieve your goals, and live your values.

Ways to generate income in retirement:

Social Security

Social Security retirement benefits offer a monthly payment to help replace your income. Most American workers qualify for Social Security benefits in retirement, and you can still work and collect Social Security but the amount you receive may be reduced if you retire before you reach full retirement age. Once you reach full retirement age, your social security benefits will not be reduced, no matter how much you earn.

Choosing when to receive the benefit can significantly affect your monthly income. While waiting to claim Social Security at age 70 means you’ll receive the maximum monthly benefit, you should consult a financial planner to make sure it's the best option for you because there are several factors you should consider such as your personal savings, other income, health care costs and monthly expenses. Edelman Financial Engines can provide individualized guidance to an Eder Retirement Plan member based on his or her specific age, marital status, and earnings history. Visit SSA.gov to get your benefit estimate or use the Social Security Quick Calculator.

Part-Time Work

Retirement doesn’t have to mean stepping away completely. Many retirees take on part-time work because they want to augment their retirement income from regular sources like Social Security, pension, annuity, and/or investments. But the part-time work actually does more than increase their income. It gives them purpose and satisfies their need to be useful. Sometimes it is an opportunity to live out their faith and be of service to others, like the man who does substitute teaching in a faith-based school or the retiree who pushes beds from hospital rooms to the ER while praying silently for the patients. The need to do purposeful work does not end with retirement; people continue to want to make a valued contribution. One of the blessings of working in retirement is that you can choose what you want to do and how much you want to work, while being free of the pressures and demands of a full-time career. Here are some part-time retirement jobs which do not require extensive training and in which you would be serving people: school bus driver, nanny or babysitter (childcare), tutor, tour guide, usher or ticket-taker, teacher’s aide, caregiver for special needs person, customer service person, office assistant, driver making light deliveries, pet sitter or house sitter, security guard. Then there are the part-time jobs related to the career from which you retired, like working as a part-time nurse or serving as a part-time interim pastor. When you start to look for part-time work in retirement, it makes sense to start in your own field where you may find work that will draw on your years of experience.

Pensions and Other Retirement Accounts

There are several different types of retirement plans. A pension is a retirement benefit some employers offer that promises regular payments from the day you retire, for as long as you live. Most are funded by the employer, although some plans may require contributions from the employee. While pension plans aren’t offered by employers as commonly as they once were, if your employer offered it at the time of your employment, you might qualify to receive a payment. If you’ve lost track of a pension plan or another retirement account, contact the human resources department of your past employer, check the Retirement Savings Lost and Found Database, or find your unclaimed benefits through the Pension Benefit Guaranty Corporation (PBGC) website.

IRAs and Other Investments

If you took advantage of additional savings vehicles and investments like IRAs and independent stocks throughout your career, they could help supplement your retirement income. What about the random shares you bought right out of college and forgot about? How are they doing? In some cases, retirees have been able to live off of the dividends of their investments. When you view your balance, you may be tempted to make some moves, but the market fluctuates. Don't panic with market downturns. Strategically calculated decisions are okay but rash decisions are not. Making impulse decisions in reaction to market downturns can significantly impact your future income streams when you want them. The main thing to remember is that these vehicles are a part of your larger plan.

Real Estate

Rental properties or other real estate assets can offer a steady income stream. While rental property can provide steady cash flow, tax advantages, and the opportunity to build generational wealth for your beneficiaries, it can also come with unwanted responsibilities and unexpected expenses. But you may discover this is a feasible option after you’ve determined your capacity and tolerance for managing property.

Life Insurance

Using life insurance as a retirement income source is an option that may work for some by initiating a policy loan or withdrawal, selling the policy to a third party for cash, or taking advantage of the death benefit in cases of terminal or chronic illness. As always, consulting a financial adviser is the best to determine if this is the right approach for you.

Between your friends at Eder and your trusted financial adviser, determining what to draw on, when, and how much — based on your individual goals and needs — is easier than you think.

Eder Financial offers complimentary retirement planning consultations to members. To schedule a consultation, email retirement@eder.org. If you want to speak with a licensed financial advisor to get investment advice for the funds in your portfolio, Edelman Financial Engines, an Eder partner organization, can help. Call 833-400-1070. EFE financial advisors can answer questions about your specific retirement investment strategy.