How to Have a Comfortable Retirement

Everyone yearns for a comfortable retirement. The level of comfort that your retirement may provide would be determined by how you come to prepare for it. Early preparation will usually result in a more comfortable retirement for a great number of people whereas the opposite would usually lead to a less comfortable and more problematic one. But not only that, it is also how you are able to take advantage of the different retirement options that are offered to you that will also determine how comfortable you will someday spend your retirement.

A comfortable retirement usually would depend on how much income you are able to earn from available sources. Retirement income may come from different sources. Some of the income may come from your Social Security. It might be a more stable income to have for retirement, but Social Security alone is not usually enough to cover your expenses and to spend a retirement in comfort. It should be supplemented by other sources of retirement income.

Other possible sources of retirement income would come from your pension and profit-sharing plans. Employer-sponsored retirement plans may also provide additional income for you on your retirement. They are usually offered in two ways. One is defined benefit where you receive a specific monthly benefit that is based on your salary while you were still working. The other one is the defined contribution where the benefits that you will receive upon retirement would depend on the amount of funds that you have contributed during your working years and the rate of return the funds were able to earn for you during the same length of time.

As to how the income earned from these plans can be availed would depend on three different options. You can either opt to receive them in monthly installments in the form of an annuity that can be paid in your lifetime. You can also have the option to withdraw your funds in a lump sum. This option would usually raise a lot of tax issues for you but may also provide you with funds you can use for better investment opportunities. The third option may be to have your funds rolled over to an IRA. Although such rollovers might become a complex issue as there are some tricky laws regarding them, this option might provide you with a way to further stretch your retirement dollars through deferred taxes on them.

There are also other sources of retirement income that you can depend on during your later years. Your own savings and other taxable investments may also provide additional income that you can use to spend your retirement in comfort. If you still feel active, you may also be able to supplant your income further by trying to work part time. Not only would it keep you occupied, part time work may also help ease up your transition towards retirement life.


Posted by Ardent Editor on Jan 9 2008 in Retirement 101

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