Unconventional Ways to Save For Retirement
Many experts recommend saving a minimum of one million dollars to fund retirement adequately. Others advise clients to set aside ten times your end of career salary, which in many cases amounts to one million dollars or more. Late starters could need to save 20% or more from now until retirement, to achieve adequate savings. With other pressing financial needs such as paying down debt or assisting children with college, the savings recommendations can feel out of reach.
Before deciding you can never retire, consider unconventional saving strategies which can supplement employer-sponsored or personal retirement plans you have in place. Three potential options which can create cash flow in your senior years include the following:
Real estate is a form of diversification that can create wealth and cash flow. While the typical home appreciates 5% each year, you can use other strategies to increase your rate of return, and they provide diversification from traditional stock and bond investments. One major benefit of real estate investments is the many forms available based on your interest, knowledge, and comfort with risk. You have the option of buying and renting residential or commercial property, repairing and flipping homes for a profit, providing cash for other investors, or buying tax liens.
Annuities come in fixed and variable products and can provide lifetime income in retirement much like a pension. They appeal to conservative and moderate investors because they offer a safety net traditional brokerage accounts lack.
Small business ownership. Starting a part-time business before leaving work can provide a way to occupy your time while supplying cash flow in retirement. The Internet has opened new options to seniors wanting to parlay current skills into a part-time income, supplementing retirement income needs.
Capitalizing on unconventional income opportunities can enhance your quality of life in retirement even if you are short of your savings goals.