- 1). Work for either an employer or yourself, and pay Social Security taxes for as many years as possible. Try to earn as much as possible each year and continue working as long as possible before retiring. The Social Security Administration, which was established in 1935 to combat poverty among the elderly and those who cannot self support, will provide income to you during retirement if you work a minimum of 10 years over the course of your lifetime. The amount of your benefits depends on the average of your earnings during your 35 highest years of income, as well as the age you choose to start claiming retirement benefits.
- 2). If your employer offers a 401k plan, enroll in it and make regular contributions to the fund tax free. Your employer may even match all or a portion of your contributions each year, essentially providing you with free money. If you don't have access to a 401k, set up another tax-sheltered retirement plan--either a traditional IRA or Roth IRA. A traditional IRA allows you to contribute money tax free until retirement, while a Roth IRA lets you save money with taxed income but pay no taxes on principle or earnings during retirement. Financial experts recommend setting aside money throughout your working years to supplement your Social Security income during retirement.
- 3). Consider a reverse mortgage if your combined Social Security income and personal retirement account contributions are not enough to pay for your retirement needs. Also known as a home equity conversion mortgage, reverse mortgages use the equity in your home to pay you monthly installment payments for a pre-determined amount of time. The money is a non-taxable loan, so upon your death or selling the home, you or your heirs must repay the loan.
- 4). Take up a profitable hobby or settle for partial retirement to generate additional income if your Social Security income, savings accounts and home equity are not enough to meet your needs. For example, if you like to garden, sell some of your produce in a local farmer's market once a month. If you are an expert in your field of work, lecture part-time at a nearby community college or work as a substitute teacher at your local high school.
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