Social Security is only designed to replace about 40% of the average retiree's income, leaving two options—either dramatically reduce your standard of living, or create additional income from other sources.
While annuities are certainly one way to create an income stream, there are some downsides to this popular approach. Specifically, annuities often have high fees, and better returns can often be achieved elsewhere.
With that in mind, here are three retirement income strategies that could be smart options for you to supplement your monthly Social Security checks.
As the name implies, a reverse mortgage works in the opposite manner of a traditional mortgage. Instead of making monthly payments to a bank and building equity in your home, the bank makes payments to you in exchange for your equity. Reverse mortgages are available to homeowners 62 and older who own enough equity in their home to justify the loan. Upon obtaining a reverse mortgage, the lender makes payments to you and interest begins to accumulate on the outstanding balance.
However, you'll never have to pay back the reverse mortgage unless you sell your home. Reverse mortgages are generally paid off through the sale of a home, either during the borrower's lifetime or after death. To be clear, there are some downsides to reverse mortgages. Even so, in many cases, reverse mortgages can be a smart way to create an income stream without touching your retirement nest egg.
Buy, start, or invest in a small business
This is the most "outside-the-box" way to create retirement income on the list, but it has become more popular recently. For example, a retired couple who plans to retire on the beach may buy a bed and breakfast. The "buy a business" route can be an especially good option because it can help cure another issue commonly encountered in retirement — boredom. Operating a business can keep you active and engaged.
There are clearly some downsides of this option. For example, owning your business can be a risky way to make money, and not all retirees are physically capable of running a business. However, this is an interesting option for entrepreneurial-minded retiree
Investing in real estate can produce excellent income and can also increase your net worth over time. And thanks to the power of leverage (mortgage financing), retirees don't necessarily need a ton of money to get started.
There are several risks to be aware of. Vacancies, bad tenants, and unexpected maintenance issues are just a few of the uncertainties. However, for many people, the reward potential can definitely outweigh the risk.
No matter your age, it pays to be well-informed about Social Security, so you can maximize your benefits when the time comes to claim them.
If you have been denied Social Security Disability (SSD) benefits or believe you have been wrongfully terminated by the SSA, contact our Social Security Attorneys at the Law Firm of Hoskins, Turco, Lloyd and Lloyd. When it comes to SSD, having the right attorney on your side can make all the difference. By working with our experienced team of legal professionals, you will improve your chances of winning disability benefits.
Don’t fight this stressful situation on your own. Filing for Social Security benefits is a time-sensitive process, so do not delay in calling us today at 1-866-460-1990. We have offices located in Port St. Lucie, Vero Beach, Fort Pierce, and Okeechobee.