More than 75 million baby boomers are on the verge of retirement and are going to have to look for alternatives to receiving money from the government through programs that were previously in place, in order to stay afloat financially.
Considering the high number of Americans who will soon be looking for extra sources of income, Consumer Advocate offered advice on how retirees can create their own paycheck and generate income during retirement.
According to Eleanor Blayney, financial expert, the average monthly Social Security benefit of $1,230 isn't going to be enough to meet the financial needs of those who are going to be retired in the next couple months, which should force them to spend their savings wisely and maintain their assets that increase and generate income.
"Today, many Americans are on their own when it comes to saving - and then spending - their retirement income," Blayney said. "The majority of Americans will have to learn how to generate income using assets and investments they themselves have set aside in their retirement plans."
Blayney suggests that Americans time their retirement carefully since the time a retiree begins taking money from their retirement accounts can make a huge difference in the amount that is available 15-20 years down the road.
Not relying completely on safe, income-producing investments is also suggested in order to have a healthy allocation of investments that will increase in value over time. Also, retirees should adjust their rate to their needs and not be afraid to spend capital from their retirement portfolio.
"Taxes, timing and spending are what matters most in creating income in retirement," Blayney added. "A Certified Financial Planner professional can help you coordinate the three in designing an individual retirement income strategy that makes sense for you."
Blayney also said that those who are entering retirement soon should understand their tax obligations because tax rates could help to determine acceptable savings withdrawals. By understanding tax obligations, Americans could also use both taxable and tax-deferred accounts appropriately to help control the amount in taxes that they owe from year to year.
Americans are also encouraged to teach their children about financial planning at a young age in order to ensure that they keep their basic savings accounts in the best condition so they can have the option to retire early if they would like to do so.