Boost Your Retirement Income and Earn More Sponsored By:Flavio J. “Joe” Carreno

Social security makes a large chunk of most retirees’ retirement savings. Most rely on it to fund their desired lifestyle in retirement. But is it ever enough?

Several factors determine how much you earn from Social Security. The average amount one can get is around $1,500, while the maximum amount is around $3,900 (which would typically require a high-earning career and waiting until age 70 to file).

To live comfortably in retirement and be able to make your health payments, you’ll need to look for some other sources of cash flow. There are a handful of strategies you can consider to boost your retirement income; however, whatever you choose should be dependent on your age and personal situation.

 

Build Retirement Assets If You Still Have Time

If you are still years away from retirement, consider investing in assets to generate dividends and interest, and ensure a monthly and quarterly cash flow.

If your employer offers a matching contribution for their 401(k) plan, contribute enough to earn the maximum matching amount. It’s like free money going into your retirement investment for each paycheck.

Also, consider some tax-advantaged plans like traditional and Roth IRAs. Contributions to traditional IRAs are tax-deductible, which means that you can defer the tax to pay later (usually when you make withdrawals in retirement). On the other hand, Roth IRA isn’t tax-deductible, so you’ll pay the taxes upfront, and as such, withdrawals in retirement are tax-free.

For savers aged 50 and above, the IRS allows for catch-up contributions up to $1,000 for IRA accounts and $6,500 for 401(k). So the annual contribution for savers aged 50 and above is $7,000 for an IRA and $26,000 for your 401(k).

 

Have an Investment Strategy

If you are already retired and have some savings built up, you should optimize it to generate more income. Most savers have portfolios consisting of bonds and stocks to ensure growth without excessive volatility. Though bonds aren’t high currently, they are an excellent tool for conservative investments to balance your portfolio.

Dividend stock is also a great retirement investment. Retirees can benefit from a constant retirement income stream by investing in dividend-paying companies with a strong balance sheet.

Another financial product to consider is high-yield savings accounts. It offers better rates than savings and checking accounts. If you keep a lot of cash in the bank, high-yield savings can provide constant returns to your savings account.

If you want a guaranteed income, consider investing in an annuity contract. Annuities are financial products offered by insurance companies that give periodic payout based on what the policyholder invested. It’s essential to look through every detail, including the fees, before investing in annuities.

 

Minimize Taxes on Withdrawals

If you’re already in retirement, it’s essential to minimize taxes on the income from your investments. This would help you get the most out of your savings.

Typically, you have the option to choose from 401(k), IRA and brokerage accounts. The withdrawals from all these accounts are taxed differently, so it’s essential to put these into your consideration. If you’ll make a large withdrawal for healthcare or vacation, then consider a brokerage or Roth IRA as they can be withdrawn tax-free.

Roth withdrawals are usually untaxed, whereas withdrawals from brokerage only incur capital gains when you sell them.

Meanwhile, if your withdrawal would be low, then a 401(k) or traditional IRA can be advantageous. A low-tax bracket means that you’ll pay less in taxes and would only move higher if you make a substantial withdrawal.

In conclusion, while the best money moves to make regarding your retirement planning are dependent on your unique situation, having a long-term and tax-sensitive strategy can make a big difference in your retirement cash flow.

Contact Information:
Email: [email protected]
Phone: 8139269909

Bio:
For over 30-years Flavio “Joe” Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.

Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.