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  • Posted March 3, 2022

Financial Planning Advice: How to Turbocharge Your Income in Retirement

As your retirement day draws closer, you may be making plans to travel, take up a hobby, or relocate to a warm, sunny climate. You may also be wondering how you’re going to finance all your retirement dreams. Now is the time to plan ahead to turbocharge your retirement income as part of your financial planning strategy.

Max Out Your Retirement Accounts

If you have a 401(k), an IRA, or another retirement account, you should be making the maximum possible annual contributions. For a 401(k), at minimum, you should contribute the top limit of your employer’s matching contribution, but you should realize you are not limited to that amount. 

Each type of account has a maximum annual contribution, so save as much as y ou comfortably can and are legally allowed. When you turn 50, you can make extra “catch up” contributions to most retirement plans. These additional dollars can increase your interest earnings as you build your retirement nest egg.

Sell a Second Home

Selling a second home such as a vacation house, an inherited property, or other types of real estate can instantly boost your retirement savings. The equity in your second home can supplement the income you’ve already saved. Proceeds from a home sale are tax-free up to a certain amount.

You may also consider making your second home your permanent residence and selling your family home instead. Many people want to downsize their homes and their expenses as they near retirement. Consult your financial advisor for the best way to maximize your proceeds from a home sale.

Invest in a Rental

If you’d rather not sell your second home, you may want to convert it to rental property. This will give you steady, ongoing income that can supplement your traditional sources of retirement income. Moreover, your investment will not be subject to market risks and can increase over the years to adjust for inflation.

While there are costs associated with rental management, there are also income tax advantages. You will be responsible for paying maintenance, insurance, and property taxes, but many expenses are tax deductible, as a tax expert can advise you. If your situation changes in the future, you can decide to sell the property at any time.

You can find many ways to turbocharge your retirement income if you plan ahead and think strategically. Every individual situation is different, so it’s wise to consult certified financial planners for personalized guidance.

Check out this article on how financial planners can help you avoid trouble when working with insurance companies!

Contact Tenpath Financial Group for certified financial planning services.