Funding retirement can feel like playing poker: You have many unknowns and you must play the cards you are dealt. To mitigate uncertainty in retirement you can establish multiple sources of income which reduces reliance on a single income stream, provides a more stable financial future, and offers more freedom.
Sources of Retirement Income

Social Security. Social Security was never intended to be the sole source of income for retirees. Unfortunately, today approximately 43% of unmarried seniors and 21% of  senior aged couples rely on Social Security payments to fund 90% or more of income.

The full retirement age is between 66 and 67 depending on the year you were born, which will result in an average monthly benefit of $1,360. Waiting beyond the full retirement age will add approximately 8% to the monthly payout for each additional year you wait until reaching 70. You may begin taking Social Security payouts at the age of 62, but this will permanently reduce your income by as much as 25% annually.
Social Security may avoid taxation based on overall household income.

Pensions. Pensions, less common today than in past generations, are employer plans, which can guarantee a set payout much like Social Security for your lifetime.
You pay taxes on pension income as if you still worked for the company.

Personal Savings, Certificate of Deposits, and Money Market Accounts. Short term saving plans tend to pay less than inflation and are best for emergency funds and other short-term needs, rather than funding retirement. As interest rates rise, they may become a more viable option for seniors looking for conservative investments to protect money from losses.
There are no tax benefits for short-term savings accounts. You pay taxes based on your income tax bracket in the year you earn the interest.

Traditional IRA, 401K or Other Work Accounts. Setting up an IRA, 401K, or other deferred savings accounts you may receive through your employer can offer multiple tax benefits. Annual income typically declines by the contribution amount. For example, if you deposit $10,000 in an IRA or 401K, you do not pay taxes on that money as long as it remains in the account. The money will also grow tax-free, leaving all taxation when income will likely be lower. These benefits allow the funds to grow faster in the investment account, giving you more money in retirement.
Work accounts give you a small selection of mutual funds to choose based on your time horizon and tolerance for risk. IRA accounts have a much wider selection of investments, but have lower annual contribution maximums, limiting the growth of balances. If you leave a job, you can convert work balances to a personal IRA, giving you more control over the fees and investment options. Another advantage of work retirement accounts is company matching dollars, which add additional contributions to your retirement account from your employer.
Dedicated retirement accounts are some of the best options to fund retirement.

The Roth IRA and 401Ks are dedicated retirement accounts that do not offer any tax breaks at the time of contribution, but allow you to grow funds and withdraw money tax-free in retirement. You must leave the money in the account for at least five years and wait until you are 59 ½ to withdraw earnings.

Combining withdrawals from both a Traditional and Roth Account in retirement can keep taxable income low, leaving you with more money for retirement needs.

Annuities. Annuities are one personal answer to corporate pension accounts. You can use retirement accounts or personal savings to buy an annuity. An immediate annuity can provide a set amount of income each month for the rest of your life. A deferred annuity allows you to choose investments based on risk and when you need the money. The benefit of a deferred annuity is that it provides a safety net in down markets, which traditional market investments do not carry. As a result of these perks, annuities cost more than mutual funds.
Annuities can provide tax benefits depending on the initial source of funds. It can also provide an effective way to pass money to heirs while avoiding probate.

Healthcare Savings Accounts. HSA or Healthcare Savings Accounts provide a way to set aside money earmarked for future health care needs. The HSA is one of the few accounts which have tax deductible contributions upfront, tax-free growth, and tax-free withdrawals. The triple tax benefit means regardless of when you pay for qualified health care expenses you will benefit from using money from the HSA account if you do not have a flexible spending account at your job. Contribution limits are $3,400 per year for an individual account and up to $6,750 for a family. Those between 55 and 65 can add another $1,000 annually. While you cannot add funds once you reach 65, you can leave the money in place to pay for qualified health care expenses at any time.

Your Home.  Home ownership can provide an income stream through an equity line of credit or a reverse mortgage. An equity line or HELOC does require interest only payments and allows you to take cash advances, pay back the line, and redraw as needed. A reverse mortgage is more permanent and can eliminate all payments while giving you an income, based on your current equity, any amounts owed, and life expectancy.

Passive income. Other sources of income, from a business, rental property, or another recurring income stream can impact your retirement. The internet has opened the door for online businesses and part-time work that can create income over time. You put the work in up front building the business, and it continues to pay you with less oversight once established.

Part-time Employment. Part Time work has become a form of delayed retirement that allows you to leave your career job and work on the side without the high stress of your current job. Using part-time employment can reduce the need to use retirement money in your early years.

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a FREE financial analysis.  Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs.  You don’t have to struggle with high-interest credit card debt any longer.  Call (855) 250-8329 or get in touch with us by sending a message through our website.