Sources of Retirement Income

Usual sources of retirement income are company plans, IRA or 401 pension plans, social security benefits, old age benefits, real estate and any personal savings.

Many companies have retirement plans for their employees. Sometime back, this used to be a very lucrative source of retirement income. Unfortunately it has gone down in value because of continuing uncertainties in the market. Many companies cannot sustain the same and their market prospects are subject to major fluctuations.

In view of huge deficits in the US economy, recessionary conditions and baby boomers, the IRA and 401 plans are going to depreciate. There is no guarantee that they will maintain their regular payouts.

Value of age old pensions has also been going down. In any case these provide only a measly amount. This sort of income is just contributory and is available only temporarily. Another temporary source is social security assistance.

Because of many inflationary conditions also, the value of pensioner funds has been steadily going down. Individuals are required to contribute more and more towards their retirement kitty.

The existing scenario does not appear to be promising for a large number of retired persons. That is why they are forced to postpone their retirement. Some of them continue to work till their final moments.

The need of the hour is that each individual takes charge of his finances and retirement income. It is not enough that persons save. These savings should also be channeled into high growth investments. Any sort of investment should be well diversified.

It is never too early to start saving for retirement. People take their retirement non-seriously and do not take adequate steps to provide for enough retirement funds. They should contribute anything from10 to 30 per cent of their incomes towards their savings. With the passage of time, it becomes harder to provide for retirement.

The first important principle of retiring comfortably is that one should live a debt free life. It is only when individuals do not carry any long term debts that they will be in a position to boost their savings.

Second very important principle is to pay your self first. According to this you should take a good portion of your income as soon as one receives a paycheck and before paying any other charges. This will increase one's savings perceptibly.

Developing a passive source of income like an income generating property could boost retirement funds. Investment in stocks another passive source of income.

Learn more about this author, Altaf Sahibzada.
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