• Business
  • Personal Finance
  • Tech
  • Luxury
  • Entertainment
True Edition Yes, You can Still Earn an Income Even When You’re Already Retired– Here’s How
0Shares
0 0 0 0 0
True Edition
  • Business
  • Personal Finance
  • Tech
  • Luxury
  • Entertainment
Business

Yes, You can Still Earn an Income Even When You’re Already Retired– Here’s How

Edward Ramirez Nov 02, 2022
0Shares
0 0 0 0 0

We spend the majority of our working years saving up for our future retirement. After all, who doesn’t want to spend their final years relaxing and enjoying the fruits of their hard work?

One important component of a good retirement plan is having a sustainable income source through your 70s, 80s, and beyond.

Stanford Center on Longevity research scholar Steven Vernon has found a great way to make this happen.

Lifetime Income Strategy

Minerva Stock/Deposit Photos — Over 40% of Americans are reportedly at risk of going broke while in retirement

After analyzing hundreds of different retirement income strategies, Vernon came to the conclusion that it’s a mix of retirement account withdrawals and stock investment earnings that’ll keep you from going broke in retirement.

He particularly talks about required minimum distributions (RMD), which is the annual withdrawal a retiree must take from their 401(k) or individual retirement account (IRA) as they turn 70 ½ or 72 (beginning this year).

This amount is calculated based on your life expectancy and your account value the previous year. Because of the low withdrawal rates in your 70s, the RMD can last you until you turn 100 years old and beyond.

One Necessary Component

monsit/Deposit Photos — The diversity of investment that the target date fund and balanced fund provides reduces the risk that comes with investing in the stock market

Another important part of Vernon’s retirement income strategy is exposing yourself to stocks. He recommends two options to go about investing: a target-date fund or a balanced fund with a 40% to 60% stock exposure.

A target-date fund is a collective investment scheme that’s specifically created to be a simpler portfolio of investments that become more conservative as the target date approaches. Meanwhile, a balanced fund is a kind of mutual fund that mixes stocks, bonds, and money market investments in one portfolio.

According to Vernon, the RMD plus stock investment strategy would cover about a third or a quarter of a middle-income retirees’ total retirement income. He described middle-income retirees to be those who have under $1 million in retirement savings.

Maximizing Social Security

luckybusiness/Deposit Photos — It’s recommended that you wait until you turn 70 before you begin tapping into your Social Security benefits

So, where would you get the rest of the money you need to cover your retirement expenses?

This is where Social Security comes in. Since it’s protected against inflation, relying on this benefit is a secure way to ensure that you continue to have an income in retirement.

 

In the end, though, you should know that Vernon’s strategy comes with risks. It’s still important that you learn to watch your expenses, especially the costs of healthcare, as you grow older.

Share This
0Shares
0 0 0 0 0
Previous Article
Starting a Business During a Pandemic? Here’s How You Can Increase Your Chances of Success
Next Article
Generative Artificial Intelligence Is Changing The Future Of Workforce - Here Is How
Comments (0)

Leave a Reply Cancel reply

You must be logged in to post a comment.

Related News

Business
How Small Business Owners Can Effectively Market Their Businesses On Social Media?
Sven Kramer Mar 01, 2023
Business
Best Small Business Ideas To Get Started In 2023
James Wiley Jan 23, 2023
Business
Kanye West is Running for President and He’s Already Got the Support of This Influential Billionaire
Arielle Azalea Nov 20, 2022
Business
Generative Artificial Intelligence Is Changing The Future Of Workforce – Here Is How
Sven Kramer Nov 19, 2022
True Edition
  • Privacy Policy
  • About Us
  • Contact Us
  • Home
  • Terms Of Use

Copyright . All RIGHTS RESERVED.

  • Lost Password Back ⟶
  • Login
  • Register
Lost Password?
Registration is disabled.