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10 Ways to Generate Income After You Retire

By U.S. News & World Report

Financing retirement has become more challenging than ever. But the good news is that we have more sources of income than we might at first realize. Here are ten ways that people generate income after they retire. Most people only need three or four to be financially comfortable.

1. Social Security. The average retiree collects about $1,360 a month from Social Security. But many people spend more than that on housing, health care, transportation and food. While Social Security may be part of the equation for financing retirement, it does not provide the whole answer. Your benefit may differ significantly from the average, based on your earnings history and the age you retire. You can retire and collect Social Security anytime between 62 and 70. The longer you wait, the higher your monthly check.

[See: 10 Ways to Increase Your Social Security Payments.]

2. Retirement accounts. Take stock of how much savings you have stashed away in an IRA or 401(k) retirement plan. Whatever the amount, you can safely withdraw somewhere between 3 and 4 percent per year to support your retirement lifestyle. Typically, you can start withdrawals, without penalty, at age 59 1/2, and for many plans you must start withdrawals by age 70 1/2 or face penalties. Remember, you may have to pay income taxes on money taken from a retirement plan.

3. Other savings. In aggregate, the bulk of individual savings is invested in IRAs and other retirement plans. But you may also have savings outside of a retirement program. Many experts suggest spending down taxable accounts first, and holding off on IRA withdrawals, since retirement accounts continue to grow on a tax-deferred basis.

4. Pensions. Many of us have seen pension plans fall by the wayside. But some retirees from the private sector and most people from the public sector still collect pension payments. If you held a number of jobs in your career, you should check with old employers about any pension rights you may have. It’s also a good idea to research how secure your pension is. Most pensions are well protected, but not all pensions are guaranteed.

5. Income from your spouse. My brother-in-law took an early retirement package at age 55, just a couple of years after his wife went back to work after raising their kids for 20 years. A working spouse can provide income for the household and qualify both members of the couple for health insurance.

[Read: A Guide to Getting a Pension.]

6. Inheritance. According to a Natixis Global Asset Management investor survey, 40 percent of baby boomers are expecting some kind of inheritance from their parents or other relative. Considering the vagaries of the economy and the high cost of elder care, you shouldn’t count on this as part of your retirement planning. Instead, consider it a bonus if you’re lucky enough to have had frugal parents who lived beneath their means.

7. Post-retirement employment. The idea of working after retirement may seem like an oxymoron to some people. But there are plenty of opportunities to supplement your retirement income with fun, low-pressure employment, whether it’s taking on occasional assignments from your old employer, working part-time at the mall or the golf course or turning your hobby into a money-making venture.

8. Rents and royalties. Using a rental property to supplement your income may involve renting out your vacation house or investing in a rental condo in your hometown. Either way, you’re taking on a responsibility, and many retirees feel the increased income is worth the trouble. A smaller number of retirees continue to enjoy royalties from a book they once published, a song they wrote or an advertisement they appeared in.

[See: 10 Tax Breaks for People Over 50.]

9. The sale of a primary residence or business. A select few can reap the rewards of selling a business they’ve owned and managed. Most of us own a home, often worth more than what we paid for it and more than it would cost to purchase a downsized retirement home. You may or may not want to use your home to help finance retirement, but it’s there as an asset you can use if you need it.

10. Children or other family members. We spent a good portion of our lives and our fortunes supporting our kids when they were growing up. Of course, we don’t want to be a burden on our kids as we get older, but don’t forget that your children, and sometimes other family members, are often willing to help out financially or in other ways.

Tom Sightings is the author of “You Only Retire Once” and blogs at Sightings at 60.

More from U.S. News

How to Max Out Your 401(k) in 2017

6 Social Security Calculators That Can Help You Decide When to Claim

10 Ways to Make Extra Money in Retirement

10 Ways to Generate Income After You Retire originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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