Supplemental Retirement Income
Fills the Gap

When essential lifestyle expenses exceed the total of all your income streams, supplemental retirement income is the answer to fill that gap. By definition, supplemental means that which is added to make up for a deficiency.

You need to first determine what your income needs are to support the retirement lifestyle that you want. Then you can determine how small or large of a gap needs to be filled.

Determine the Gap

The next step in determining your supplemental retirement income need is to determine what the gap is between your total retirement income streams and your total lifestyle expenses.

There is a free, simple and easy to use calculator that will provide a report to show how long your retirement income streams will last and how much you will need to supplement retirement income.

(A new window will open. To return to this page just close the new window by clicking the 'X' button in the upper right hand corner of the new browser window.)

Be prepared to enter the following information into the calculator:

  • When do you plan to retire?
  • How much have you saved for retirement?
  • What is the average annual interest rate you feel you can earn on those savings?
  • How much do you need to live on monthly in today's dollars including taxes?
  • How much is your monthly pension plan income in today's dollars?
  • How much is your monthly Social Security income in today's dollars?

The calculator assumes you will be at least 59 1/2 years old so withdrawals from your retirement accounts are penalty free. Your withdrawal rate will be the suggested 4% per year, increasing for inflation based on the default rate of 3.5% or whatever rate you input.

The calculator allows you to enter your expected increase in pension and social security. The default in the calculator assumes 2% increase per year in pension and 2.5% increase per year in Social Security - but you have the ability to change those assumptions.

It also assumes a 3.5% annual inflation rate, which you can change.

The schedule it provides, which you can print out, identifies the "gap" of earnings required to meet your lifestyle expenses.

Fill the Gap

The needed supplemental retirement income for making up the difference between your retirement income streams and your lifestyle expenses can be accomplished by rearranging your savings and investments, obtaining a part-time job, starting a home business, selling your real estate, or borrowing against your home equity.

As the baby boomer generation enters the retirement phase, so will their financial assets. Depending on how much has been saved for retirement, a portion of their assets will need to be converted to income. This is what I meant by rearranging your savings and investments. Instead of assets they may become income streams. Your Certified Investment Adviser or Certified Financial Planner can assist you with this.

Income is important as you have to eat. It doesn't matter how much money you have, you need income every day because you have to eat.

Options for Filling this Gap

Social Security used to be the main source of retirement income for most people. But today it does not support much of a lifestyle.

A good 25% of retirees will fill the retirement income gap by obtaining a part-time job or starting a home based business.

Both options are good choices to provide supplemental retirement income. It depends on your individual preference.

Some retirees will choose to work part-time to supplement retirement income. More companies are recognizing the importance of the older workers and are becoming more flexible in their work arrangements. Flexible hours in a day, flexible days of the week, and even flexible location - like, working from home. See my article on the best retirement jobs.

The internet has provided an opportunity for anyone to earn money in a variety of legitimate home business ideas. You are never too old to earn money on the internet.

(If you click on the legitimate home business ideas link, a new window will open. To return to this page just close the new window by clicking the 'X' button in the upper right hand corner of the new browser window.)

You can earn a living from documenting information about a topic that you are passionate about. You probably know information that others would also like to know.

People search the internet when they want to find out about something. If you can write articles about those subjects that are of interest to you, then you can create supplemental retirement income. You can do this by working from home and working when you want to work.

Another option is being an affiliate marketer where you earn commission on referrals to merchants. Merchants like affiliate marketers because they broaden exposure to the merchant's products including a personal testimonial from you. You can help potential customers make the final buying decision - and get paid in the process.

Later, I will talk more about affiliate marketing and how to earn supplemental retirement income by sharing your knowledge about a subject that is near and dear to your heart.

Supplemental Retirement Income
Bonus Idea

You need to ask your Certified Investment Advisor or Certified Financial Planner about this idea and if it is right for you.

There are specific businesses deemed vital to our economy by our government - businesses that deliver oil and gas across the country in pipelines. Government incentives require these businesses to return high dividends to their stockholders. Check with your Financial Advisor about the following stocks and fund - BWP, PAA, EEP, KMR, MMP, CPNO, TYY and more.


Supplemental retirement income is under your control. I will include several more ideas on the Resource page of this website.

Bookmark this site (CTRL+D) and please return often for more helpful information in your planning for retirement

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