Saving for retirement is a big effort, but making sure that the money you have saved works for you until you no longer need it is another challenge. By utilizing different forms of income, even after retirement, and keeping an eye on your spending, you can live comfortably.
Leonard Rhoades, Operations and Portfolio Manager for Global Wealth Solutions, LLC, joined us in studio to discuss some of his tips for making sure everything goes smoothly after you wrap up you 9-5 life. He says one challenge is that low interest rates on things like treasury bonds, money market accounts, and other forms of "safe money" don't make it easy to generate any income after you stop earning a work paycheck.
However, there are ways you can earn money even after you are done working. While fewer people have pensions now than they did 40 years ago, a 401k or other retirement assets can help you have money during retirement. As you take money out of those accounts you to help pay for monthly expenses like rent, car payments, or food, you can consider them as "paychecks". These funds have less risk to them if something were to happen to the financial market, especially if you shift your investment mix as you get closer to retirement age to a more stable one.
Money you earn from more risky investments can be considered "playchecks". They can be used for the future, vacations, travel, experiences, or other fun extras instead of being depended on for your daily living expenses.
In all of this, it is important to have a plan for unexpected expenses after you retire, just like it is important before you leave the workforce. A flat tire, a car accident, a fall, or another unexpected situation can cost you. If you need to stay in a hospital for a short while, or need rehabilitation therapy, you'll want to be able to pay for it, so it is important to make sure you have something set aside to help pay for those kinds of things.
There are still ways you can generate income without collecting a paycheck from an employer. You can do it with dividends from low interest stocks, or annuities. Talk to your financial adviser about how you can best utilize these different types of investment and income.
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