Supplemental Retirement Income – Why You Need It

Supplemental Retirement Income - Why You Need It
Supplemental Retirement Income – Why You Need It

Tear up your newspapers & turn off your TV! To listen to the TV, radio, and press these days, one would think that we are on the brink of severe financial hardship. It gets real discouraging, if you participate. I am convinced that this will become a self fulfilling prophesy if they continue to give in to these fears. This certainly can be depressing for those on a fixed income f they have not taken steps to insulate themselves from it.

Most retirees have saved a “nest egg” that is designed to provide them with income during their retirement year. Many times, those folks have invested their funds in stock market mutual funds or other securities that are based on the market, in order to obtain the highest possible rate of return. This is a very logical thing to do, if it is done with a long term view of the market and how it works. This is the critical part.

You cannot view a downturn as a crisis. For the past 80 or so years, the stock market has always returned to higher plateaus after a market sell off like we are seeing today. Patience is the important virtue. Money is only made or lost when securities are bought or sold. Any market movements in between buying and selling are only ‘paper’ gains and losses and they don’t really count for you or against you. You never actually lose money until you decide to sell for a price lower than you paid for the stock.

I have found that one very good way to insure against market volatility is to have some streams of supplemental retirement income. These are established to provide income that is independent of my investment portfolio. This internet income comes in whether or not the market is doing well. When the market is up and thriving, income from this source just adds to the wealth, but when the market is down, it prevents me from having to sell stocks when they are down. This also enables me to focus my attention on things other than the stock market, which is a very good thing!.

Before I had my “Cash Machines” established and producing income, I would watch the stock market each day religiously. I would worry each time that the market closed lower than the previous day (which it normally does about half of the time). Now, I barely look at the market every few weeks. When there is a market downturn (like now), I find myself looking at it even less often. Life surely is much simpler now and my attitude tends to be more consistently positive as well.

My “Cash Machine” on the internet comes from writing articles, electronic books, and hosting a membership site. My membership site is where I show others how to leverage their experience to create cash machnes of their own!. My articles generally drive traffic to this site and my e-books sell quite well and thus produce a small stream of cash to augment my Social Security check and investment income. All of this is very inexpensive to do and only takes a couple of hours each week. Besides the income aspect of these activities, they provide me with activities that make me feel productive and engaged. This whole idea of “Supplemental Retirement Income” is just ideal for me in many ways!

There are many, many other ways to produce a steady stream of income. It has been said that “If you find something that you are passionate about doing, you will never have to work again in your life”. Everybody should do that which they enjoy and, that way, it will not seem like work and be more like a fun hobby. I know several people who buy and sell items on eBay for nice profits while others are doing what is called “Affiliate Marketing”. This is where you sign up as an advertising arm of a company with a product to sell and you spend some time developing ways to advertise the product online. A sales commission is automatically deposited into your bank account on each product sale.

Once you setup an ad or webpage to sell the product, you just monitor the activity, tweak & tune your ads and watch your bank balance grow! After a while, this really becomes a very passive activity. Once you have one of these “Cash Machines” working, you set about to create other, independent machines. Each time you creater another income stream, it just gets easier and easier! Don’t worry about the technology, either. There are many freelance we page designers who will create your ads and pages for only a few dollars!

Although a few people are getting quite wealthy with such endeavors, most people I know are generating from $2,000 to $8,000 per month from some combination of internet activities. This may not be enough to fully fund your retirement, but this level of supplemental retirement income certainly will make your retirement a whole lot more fun and worry free!

The Advantages of Retirement Planning Worksheets

The Advantages of Retirement Planning Worksheets
The Advantages of Retirement Planning Worksheets

What are retirement planning worksheets? First of all, retirement planning should be seen as an incredibly important task that should be required reading and learning during one’s education, yet it has seldom made it into everyday education, along with financial planning. many people like to approach retirement with a vision that I like to call the “deferred life plan”. That is, one work for 40 years, and defers enjoyment, travel and leisure until the time when one can no longer work and generate income. that is when one must rely on the nest egg saved for retirement.

While I don’t agree with the deferred life plan model, I certainly agree that everyone must understand and do some sort of retirement planning, even if they view retirement as a worst case scenario. To that end, it’s extremely important to understand the importance of beginning the retirement planners process as early as possible. It’s somewhat obvious that the sooner one starts saving for retirement, the most one will have when they retire. The more one has during retirement, the higher the standard of living (read quality of life) one can expect to enjoy. This is where retirement planning worksheets can come in handy.

While there are many software tools, financial and retirement planning packages out there, sometimes it’s best to keep it simple and utilize basic retirement planning worksheets. Sometimes basic numbers just get lost in the shuffle of a complicated retirement planning software. Just like learning complex math in school, you didn’t need a super computer to learn geometry. So why not take an initial crack at learning retirement planing by using a simple worksheet. This can be as inexpensive as using a free worksheet software like that in open office or google docs or zoho. It can be simple and easy to do retirement planners and see just how your retirement plan will likely end up.

Why Build a Retirement Planning Worksheets

It goes without saying that those who plan have a much better chance of hitting their goals. This is also very true in retirement planning as well. You basically need to know three things:

1) How much will I need in retirement for a moderately comfortable lifestyle? 2) If I save for retirement with these assumptions, how much will I have in retirement? 3) What other income streams am I intending to consume during retirement (pension, p/t job, social security)

Determining the answers to these questions is a personal thing, and while everyone may have different assumptions and numbers, the process is basically the same, so retirement planning worksheets can be used by many different people and still be a beneficial tool. The end result of using the worksheet is that given a set of factors, you will be able to come up with a number, based on your current lifestyle that will indicate what your retirement situation will look like in several years.

Planning Worksheets Are Not The “”End All” Answer

While retirement planning worksheets are a great way to identify shortfalls and potential issues early in the planning process, they are not the “end all” or “be-all” solution. They have their limitations. First they are based on assumptions, and like anything, assumptions will change over time. that is the reason why one should do a retirement planning checkup every two to three years to see how one is doing in relation to retirement planning goals and estimates. The assumptions or really a predication of future events-and we all know that no one can predict the future, with any certainty.

For example, most retirement calculators assume a consistent income and adjust for annual salary adjustments and inflation. But is it realistic to assume an annual raise of 3 percent each and every year for 40 years? Probably not, let alone to assume consistent employment, and regular spending patterns will change over a forty year career. So it can be a good exercise to vary the assumptions, and do a sensitivity analysis to see what the impact of a factor has on the calculation. This is using the power of retirement planning worksheets.

So we have talked about the capabilities benefits and limitations of planning worksheets. What if you want to take another approach? There are many other solutions that one can implement to aid in retirement planning. First, one can go ahead and purchase retirement planning software. There is commercial available software that you can enter your personal data into that will spit out a fairly substantial and detailed report of what your retirement future will look like. Among the nice to have options with this approach is the ability to have the software run simulations, like Monte Carlo simulations to determine statistical odds of hitting your retirement goals. But be prepared to spend time and money with this approach.

many of these packages will integrate with your current day to day finances and provide budgeting and bill paying capabilities. the benefit to this is that you are about to keep a regular check on how your plan is going. As well, you can see exactly where your plan is not working. For example, if you are spending over and above your budget, you will see how this is impacting your retirement plan. This improved clarity may improve your chances and awareness that postponing some minor purchases today can have major improvements in your life tomorrow.

As we said earlier, retirement planning is an important and required task for nearly every worker out there. By starting early enough the job gets easier, and the odds of enjoying a comfortable retirement are greater. Also by using retirement planning worksheets or other suitable planning tools, the task of developing a plan is easy enough that nearly anyone can do it.

Retirement Lifestyle Freedom

Retirement Lifestyle Freedom
Retirement Lifestyle Freedom

By the term Retirement Freedom, I mean a non-traditional retirement away from the work-a-day world. I call this “Fretirement” since it is a lifestyle that is free from all of the expectations that most of us have with retirement. In “Fretirement”, you don’t necessarily quit working, rather you quit having to work.

Why go through all of the traditional drudgery associated with a traditional job? Who really wants to spend an hour or more each day commuting to and from an office? Is there anybody who really enjoys office politics and ladder climbing? Or how about the words “outsource” and “downsize” and “layoff”? Can you really get excited about these things? Do you really want to spend a large portion of your earnings for fuel to get to work and for overpriced and unhealthy food during “lunch hour”?

It is possible, at almost any age, to effectively retire from the traditional workforce and to create your own economic machine. Thanks to the electronic age and the advent of the Internet, you can likely make this happen in that area of business wherein you enjoy a certain amount of experience, knowledge and passion. In fact, the more passionate you are about a niche, the more likely you are to be successful in making a good living in it.

In his current bestselling book, “The 4 Hour Work Week”, author Timothy Ferris writes about how he managed to wean his company from its dependence on him being present 5 days each week. He did this by outsourcing many of the routine tasks that he did to a Virtual Assistant, or V.A. that he found on the Internet. In fact, he was able to do this so effectively that soon, he weaned his company from needing him at the office 2 days per week. Due to the company’s inefficiencies, he and his V.A. were able to produce more results for the company during the 2 days each week that he was absent than he had been producing when he was present!

This went on and on and, over time, he showed up at the office very seldom, but his production was so great that his managers were thrilled and even gave him a raise and promotion! Now, at age 34, he has effectively “retired” from working, enjoys a lot of travel and has a staff of 3-5 V.A.’s working for him across the globe! He quickly moved to his desired retirement lifestyle at the ripe old age of 34!

I’m not suggesting that you will be able to work miracles like Tim Ferris did, but, you can certainly explore the opportunities in the niche of your passion and expertise. You might elect to do something complementary to what you are currently doing or perhaps explore a whole new way to accomplish similar results by harnessing the power of the Internet and by outsourcing menial tasks to V.A.’s so that you can focus on the really important tasks.

If you are nearing the traditional retirement age, you may be able to spring free of your job years ahead of schedule if you can get some Internet “Cash Machines” setup to provide a level of passive income for you and your family. You can establish many diverse streams of income from various internet activities and each can be independent from one another. Once you have these in operation, you can have the retirement lifestyle that you desire!

For example, I have income from the sale of an electronic book, or e-book that I have written on the subject of retirement. I also do some affiliate marketing wherein I advertise products for several large companies such as Best Buy and Amazon.com. Additionally, I have a membership site on the Internet where retirees come to learn ways to earn income from Internet activities, and I provide advertising space for Google and other companies. All of these income streams are passive and the income just shows up in my bank account each day! Some days are great and others not so great, but, on average, I earn enough to support 2 sons in a large accredited University without using my Social Security check!

It took me a few months to learn these techniques and a few more months to put them into operation, but now all I do is tweak and tune my marketing programs and explore new ways to compound my streams! Fortunately, I am able to play golf several times a week and get to travel extensively to visit my grandchildren and to just have fun!