by D. Victor

Created on: January 17, 2008

Retirement, like life itself, is not primarily about finances. However, increased income facilitates comfortable living at any stage of life. Maximising retirement income is more than just reducing expenses or dumping funds into annuities years before retirement. It is relatively easier to maximise retirement income in the pre-retirement phase, especially several years ahead. However, most people are past that stage and have not planned adequately. Fortunately, there are at least ten ways to maximise retirement income.

1. Reverse mortgages- With a mortgage, the property value increases while the mortgage balance decreases. The reverse mortgaging strategy is that complete opposite. It involves reducing the equity on your property while increasing the debt. The debt would be collected when the property is transferred or upon the death of the owner. The equity would be reduced in the form of a monthly payment to the property owner. This somewhat debatable financial strategy is appropriate for retirees over the age of 62 who do not wish to leave an estate.

2. Mortgages- Some commercial banks would mortgage a retiree's property once a guarantor is assigned. For this to work, the mortgage interest rates should be lower than the highest interest rate one can achieve on a high-yield Certificate of Deposit or similar investment instrument. It may be an unlikely strategy, but could work once the circumstances are favourable. The retiree should also have adequate life insurance as well, to protect the guarantor from incurring debt in the event of the retiree's death. This is another way to utilise the equity of a property.

3. Tax reduction and immediate annuities- Taxes are a drag on your income. Strategies to reduce taxes involve using gift annuities for charities and investing in tax-free immediate annuities. Immediate annuities also provide increased income that is typically protected from creditors. Apart from increasing your income, you cannot outlive the payments from an immediate annuity.

Utilising the tax-free cash lumpsum and reduced pension on your deferred annuity can also reduce taxes. By definition, taxation on pensions from deferred annuities takes place during the payout phase. Taking the reduced pension could reduce your taxable income and also provide a lumpsum where you can earn tax-free interest.

4. Generate passive income online- there are many strategies that one can use to make money online. Article publishing, ghost-writing, affiliate marketing and advertising

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