Three best retirement income options

Retirement is a defining moment in one’s life as the income that earned your livelihood is likely to stop. Before you reach the retirement age, it is important to find your post-retirement income options that will replace your salary well in advance so that the life post retirement can be experienced at ease.

There are various retirement income options available for people to cope with post-retirement expenses. Here are a few shortlisted retirement income options, a few of which are sponsored by the employer as well.

1. 401(k) retirement plan: The 401(k) retirement plan, sponsored by the employer, allows employees to save and invest a portion of their pay before the taxes are taken out. Choosing an efficient 401(k) plan allows you to layer your funds in a range of options like mutual funds, stocks, bonds, target-date funds, etc. reducing the risk of loss of funds due to failure of an investment tool.

2. Part-time work: Part-time jobs have been a great source of income besides the primary savings and post-retirement investment options to pay off the daily expenses. The perks include a relieved post-retirement life where you can spend a few hours every day working to earn a significant amount that can contribute to your funds as well as keep you mentally and physically active post retirement.

3. Social Security: A large population of Americans above the age of 65 receives the benefits of Social Security which have been found to account for 39% of their income, according to the data released by Social Security Administration. However, it is important to time your Social Security option well as you can get differential rates of pay-out at different ages—the higher the age, more will be the payout rate.

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