It’s a sad fact: even if you thought you had made ample provision for your retirement, there’s a good chance you’ll find yourself unable to support your former standard of living. But 60-plus citizens are fighting back with strategies to make extra money in their retirement.
Your own retirement may seem a long way off, but planning in advance and being prepared will give you a head start. We take an in-depth look at how retirees are breaking free from the norm that says retirement has to be an uphill struggle financially.
In this guide...
If you’re planning ahead (as you should)
We recently explained how to prepare for retirement, but there’s one extra strategy you can apply. Invest a small percentage of your retirement planning funds in a longevity annuity. Why a small portion?
The annuity typically only starts paying out once you’re over the age of 80. Why should you have one? Let’s be frank, if you live that long, you may well have run out of other income sources, and even if you haven’t, they won’t have the same value they had when you were in your sixties.
Adjust your investment portfolio based on your life-stage
Although this is a rather simplified way of explaining it, you can classify your investments into two broad categories:
- High-value growth, low dividends.
- Lower value growth, high returns.
In the run up to your retirement, you should resist the temptation of structuring your portfolio for maximum income. And if you do choose this route, you shouldn’t draw the income. Instead, you can reinvest, grow the value of your investment portfolio.
When you retire, your priorities change, and you want increased income. You also want to simplify your portfolio so that it’s easier to manage. All the same, you should reinvest as much as you can.
General investment tips to take care of your retirement
- Limit risk by diversifying your portfolio. If one of your holdings doesn’t profit, it shouldn’t kill your value. Spread your investments thinly across investments. 2% in any single holding is ample.
- Only sell shares to buy better shares. Eating up your principal limits your money’s ability to make more money.
- Don’t speculate. “Playing” the stock market is a short-term gamble. Invest in strong shares and keep your money there.
- Ride out the rough times. After the last market crash, spooked investors lost out big time when share values recovered to their former levels.
- Unless you’re an expert, an investment manager will be worth the money you pay for his or her services.
- Don’t panic if you’re below benchmark in returns. Risky shares fluctuate, and wise investors often find themselves underperforming compared to the all-share index. In the long run, they’ve got a stronger investment portfolio.
What if you don’t have substantial investments?
Let’s get real. Indebted adults don’t have money to invest. They’re fighting to pay off debt. Even if they had the foresight to get a retirement plan, it will mean a reduction in earnings, and as real value (what you can buy) outstrips absolute value (how many dollars) over the years, purchasing power takes a dive.
1. Job hunting when you’re over 60
Here’s where it gets scary. You might have to get a job. You know that most employers prefer 30-somethings, and you aren’t feeling particularly confident. That doesn’t help when you’re trying to “sell” yourself to prospective employers.
Surprise! In some ways, you have a competitive edge. Take advantage of it:
- You have skills that you have applied and upgraded over decades.
- You don’t have unrealistic expectations as many younger people may have.
- You have oodles of experience and you aren’t considered as impulsive as a younger counterpart.
- You know what employers want and how to deliver it.
- Simply because of your age, people tend to respect you.
2. Sell your services on the informal job market
Starting a business takes capital – or does it? When you sell knowledge and services, you already have the “equipment” you need to start your own little business – and the internet provides you with all the platforms you need to have a “shopfront” without the huge overheads.
- Show people around your area by designing exciting tours and selling them through Vayable.
- Join a house-sitting marketplace. You’ll be seen as more responsible than a youngster. Learn more on HousesittingGuide.
- Rover for dog walking and pet sitting.
- Sign up for Rent a Grandma and just be a grandma – for cash!
- Become an adventurer for cash by getting a seasonal job through Older and Bolder. You could land anything from running a tourist shop to being a tour guide.
- Share your experience for cash with Encore Fellowships and show the young ‘uns how it’s done.
- Take care of teens on trips with Bold Earth.
- Need something less active? Start selling your services on outsourcing freelance platforms like Upwork and Freelancer.
- Ask local businesses whether they need help with light (or heavy) admin from time to time.
Other platforms to investigate:
3. Turn a hobby into a business
Whether your hobby is playing a musical instrument, cookery or crafting, there’s money to be made. Give kids lessons, start a food stall at a local flea market or farmers’ market, or sell your crafted products in person or online.
Working while retired isn’t all bad
Many retirees really enjoy working or being self-employed when they’re over 60. Here are a few of the upsides:
- Your retirement savings last longer.
- You get mental stimulation that keeps you sharp.
- You get to meet new people and make new friends.
- You learn new skills and remain independent.
- You don’t have as much risk of becoming bored or depressed.
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