As experts in retirement planning in New Jersey, here are five strategies we recommend to our own clients.
Delay Social Security Benefits
While there are some instances where it makes sense to take your Social Security benefits early, most of the time, it’s best to wait. If you claim Social Security at 62, your benefit will be reduced by as much as 30 percent. For every year you wait to take your benefits before full retirement age, your benefit increases by 8 percent.
Earn Extra Income with a Part-Time Job
While it might not be everyone’s favorite option, you can work part-time to collect more money in retirement. There are many seasonal and part-time opportunities available - and you only need to work 10-15 hours a week to make it worth it. Plus, these gigs can provide you with socialization and keep your skills sharp.
Use the Bucket System
The “bucket system” lets you divide your money among different kinds of investments based on when you’ll need it.
- The “Now” bucket should cover your basic expenses for up to one year.
- The “Soon” bucket will be your source of income for the next 10 years. You may need to replenish this bucket by selling some investments.
- The “Later” bucket shouldn’t be tapped into until a decade into retirement, allowing this money to be invested more aggressively into stock funds.
Get Income from Your Investments
Dividend-paying stocks can make up a decent chunk of your stock portfolio. Look for companies that have a record of regularly increasing dividends over time, such as Caterpillar (CAT) and 3M (MMM). These stocks have yields of 2.5 percent to 4 percent. You can also get income from your bonds, exchange-traded funds or mutual funds.
Purchase an Annuity
An annuity is a contract between you and an insurance company. You’ll make a lump sum payment or series of payments and receive regular disbursements. The purpose of an annuity is to help protect you from outliving your income. You can even buy an annuity that has survivor benefits so that you’ll continue to receive payments after your spouse dies.
Because each person’s circumstances are different, it’s important to contact retirement financial services in New Jersey. This way, you can discuss your unique situation and the best ways to grow your income during retirement. For creative solutions that will work for you, contact Leonard Financial Solutions today.