Skip West On How to Secure Your Income During Retirement
Posted on Mar 21 2023 10:36 AM
"Generating Income When You’re Not Working, Diversifying Your Options, Retiring the Right Way "
Despite all the articles and advice out there about retirement, there are millions that turn a blind eye to all of it. Whether it’s because they’re nervous, they won’t be able to afford any of it, or because the process seems overwhelming, the end results are the same. Skip West is the president and CEO of a financial firm that helps people put their finances into perspective. He opens up about what secure income is and what it means to secure it before heading into retirement.
Generating Income When You’re Not Working
The basic idea of secure income is the same as the one behind your paycheck. After a certain amount of time has passed, you can add new income to your list of assets. Usually, that’s from an employer, but it can be anything from a rental check (if you own a property), stock dividends (if you’re a serial investor), or government funds (if you receive financial assistance).
While there are certainly exceptions to every rule, the general idea is that you can rely upon this money to show up on time every time. Skip West says there’s no reason to give up secured income during retirement — even if you’re not working.
Diversifying Your Options
Much like you would diversify your portfolio to ensure that it doesn’t tank simply because one of your investments took a nose-dive, you need to have the same approach with your retirement income. For instance, you might have 20% of your income in the form of Social Security, another 20% from your pension, 20% from an IRA, 20% from income generated through rental properties, and the final 20% coming from a part-time job in a passion field (e.g., pouring wine in the South of France or teaching guitar lessons to kids).
When you’re thinking about your secured income, it’s important to consider what you’re comfortable with. For instance, not everyone will want to be a landlord, no matter how lucrative it is or how good of a property manager they can find. This is an entirely understandable position, though it will be important to research other sources of revenue to ensure that you have everything you need to get by (and hopefully then some).
Retiring the Right Way
There is no perfect way to retire — it all depends on what you’re looking for during your Golden Years. Because unexpected events are the norm rather than the exception, you’ll want to give yourself a fairly big financial cushion. This doesn't always have to be in the form of catastrophic illness or injury. For instance, even if you picture yourself catching your own dinner from the sea during your retirement, you may decide you want to cover a descendant's higher education down the line. Skip West notes that what’s important is planning your budget in a way that covers more than just your everyday expenses.
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