Average Retirement Income - Do You Have Enough?
The average retirement income is appallingly low. According to the Employee Benefit Research Institute (ebri.org), the average elderly income totaled $29,214 in 2006. Is it no wonder, that you sometimes hear stories about retirees having to choose between buying food and buying their needed medications?
Ideally, we all would like to maintain the lifestyle we have become accustomed to during our working years. Usually, a retiree's income will drop once they leave the workforce. If the average retirement income of $29,214 is too low for your comfort, as I expect it is, you need to develop an income stream that will sustain you in your retirement years.
There are four ways to increase your income.
- Practice debt elimination.
- Invest for income.
- Start a business.
- Get a job.
Reducing your debt and daily living expenses will increase your cash flow. It is not glamorous, but it works! For every dollar of debt you pay off, you are effectively investing a dollar at the stated interest rate of the debt.
So if you have a credit card that charges 18% interest, you are earning 18% on your "investment" by paying off that credit card. Once you have your debt paid off, you can take the amount you have been paying for debt interest and invest it for income and capital growth.
Investing For Income
Some folks like to develop an income stream from their investments. Dr. David Eifrig Jr., MD MBA, editor of the Retirement Millionaire newsletter, and Dan Ferris editor of the 12% Letter, both recommend owning world dominating dividend growers. That is, stocks of businesses that are leaders in their fields, who pay growing healthy dividends.
The key to this strategy is to buy solid blue chip companies that have little or low debt, dominate their markets, and grow their dividend income.
Take advantage of the compounding effect of re-investing the dividends. That is, re-invest your dividends in the same stock. It is as simple as clicking an option on your brokerage account that says "reinvest dividends".
Every time a dividend is paid, instead of receiving cash, you purchase stock automatically without brokerage fees. Over a long time your dividends compound their growth. You buy a small amount of shares every time a dividend is paid quarterly. At retirement, you can choose to receive an income stream from your dividend paying stocks instead of buying more shares. Great!
Start A Business
Another way to grow your average retirement income is to start a business. A passive way to earn a steady stream of income is to create a website about something you love and have a deep interest in.
A website is nothing more than a collection of articles about a central theme. Anyone can write articles about something they love. After you have 30 or more pages of content, you can begin to monetize your website. By adding Google ads, you get paid every time someone clicks an ad and visits the advertiser's website. When your earnings reach $100 or more a month, Google sends you a check.
Many successful people earn hundreds to thousands of dollars each month doing this simple task. The best way to get started is to invest a small amount of money in SBI.
This is the system I use to grow our average retirement income. SBI will show you how to even get others to write free articles for your website..
Another way to grow your average retirement income is to become a landlord. Housing today is the most affordable it has been in a long time. While, real estate appreciation may not grow like it did during the boom years, a wise conservative investment in rental homes, condos, and multi-family buildings can generate a steady income stream.
You will need to invest a large down payment and/or use some creative seller financing to build cash flow. Buying properties from motivated sellers can help you achieve these goals.
The nice thing to remember is, real estate investing is considered passive income by the IRS. You will only have to pay 15% tax on your income. Consult your tax advisor for more details.
Visit legitimate-home-business.com for more legitimate home business ideas.
Get A Job
Another way to increase your average retirement income is to get a job. If you have a job, a second one may be your only other option if you are unwilling to follow any of my suggestions above.
But this is easier said than done. The current job market is in a slump. Only those who keep their skills current are employable. You may need to settle for a job below your education and skill level.
If you have been downsized, you may need to choose another career. An investment in education will help you restart your life. Just choose a career that will grow. Consider health care, computer related jobs, trades, or business management.
If the average retirement income of $29,214 is too low for your liking, you need to grow it now. Don't wait until retirement to implement a plan that will give you a dependable income in your retirement years.
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