Christina provided expert insight on financial planning for retirement in the MoneyGeek article "Older Adults' Guide to Income Streams and Money Management in Retirement". Included are tips on how to earn income in retirement, calculating life expectancy when planning for retirement, and a list of resources for income streams for aging adults.
You can read Christina's excerpt below and you can read the whole article here on the MoneyGeek website.
If an older adult was not able to save heavily before retirement, what’s the first tip you recommend for earning income in retirement?
The first tip for earning income in retirement is to keep working, contributing and earning — consider a full or part-time job. Working after retirement works for many people because it’s their choice, and they can pursue a passion or purpose that may not have been an option in their earlier years.
Teaching and tutoring, for example, offer the social interaction and mental stimulation some miss after they leave the workplace. Working part-time or turning a hobby into an income-producing small business can also be a great source of income to cover discretionary costs (such as entertainment, travel and gifts), but remember to watch the income limits that could trigger:
- Taxes on Social Security benefits
- Increased Medicare premiums
- Reduce Social Security benefits if you’re drawing Social Security before full retirement age.
Another way to have more money is to spend less. There are fixed costs for food, clothing, shelter, etc., but there are often other areas where spending can fluctuate depending on how much income there is.
How do you recommend an older adult calculates their life expectancy when financially planning for retirement?
Calculating your life expectancy is difficult because, although it is based on calculations and statistical modeling, no one really knows. We spend a lot of time talking with our clients about lifestyle variables (physically active vs. passive, social interactions, travel, etc.), health and family history. Your longevity directly affects your financial plan because the longer you are expected to live, the more money you will need.
Longevity increases the chances of needing some living assistance — either at home, in a continuing care retirement community or at a facility — which can increase costs exponentially (and lead to a depletion of assets). That means that financially, it’s preferable to calculate a long life expectancy to determine a viable retirement financial plan proactively.
Resources for Income Streams for Aging Adults
There are a variety of resources available for aging adults to begin preparing for retirement as early as possible. No matter what stage of life you’re in, the following resources are a good place to further your knowledge on potential income streams and how to get started today.
- Life Expectancy Calculator: The living to 100 life expectancy calculator will calculate your life expectancy using researched medical and scientific data.
- AARP Retirement Calculator: Answer questions about your household status, salary, retirement savings and other income and the AARP calculator can provide insight on whether you’re saving enough money for retirement.
- Social Security benefits calculator: Provided by the Social Security Association, this page consists of various tools and calculators to help you determine government benefits you may receive when you retire.
- American Retirement Association: This nonprofit organization was created with the goal to educate retirement plan and benefits professionals and create a framework that allows working Americans to retire comfortably. On the site, you’ll find professionals, advocacy, and a variety of connections for retirement education and support.
- PensionHelp.org: A website from the Pension Rights Center, PensionHelp.org connects individuals with counseling projects, government agencies, and legal service providers that offer free information and assistance in pension planning.
- Pension Counseling and Information Program: Assists Americans in managing their retirement benefits and assists with any employer negotiations for unpaid pension benefits.
- Center for Retirement Research at Boston College: A variety of research and information regarding retirement income. The CCR has been recognized by the New York Times as the nation’s leading center on retirement studies.
- National Council on Aging: On this site, you’ll find resources, tools, best practices and advocacy for aging with health and financial security.
- Internal Revenue Service — Tax Information for Seniors & Retirees: A free tax-filing tool including an Interactive Tax assistant. This tool includes information specifically for older adults, including deducting medical expenses, tax scams, finding a tax-aid volunteer and special rules.
- National Older Worker Career Center: Connects older adults, age 55+, with part-time and full-time career opportunities.
- SeniorLiving.org: A comprehensive website dedicated to helping adults with all aspects of aging. This is a one-stop-shop for aging adults, from money management and retirement resources to health, living and technology.