How Many Retirement Income Streams Can You Create?

How much do you have in savings?

Is it enough that you could live off the income in retirement?

If you’re like most people, it’s not.

Most folks aspire to rely on two other things for any retirement income.

They say they’ll rely on their super, as well as their house.

Maybe you think the same thing. That’s nice. But what if neither of these assets can provide the income you’ll need?

What will you do after that?

It’s a thorny question. But there’s no point ignoring this. If you act now, there’s nevertheless enough time to build an entirely individual source of income…

Last week all of us wrote to you about the idea of a ‘Retirement Plan B’.

But to be honest, that’s not nearly good enough.

You should also have a ‘Retirement Strategy C’…and ‘Retirement Plan D’…oh yea, and a Plan E, F and G too.

More, if you like.

If you’re only relying on one income stream for retirement, you’re leaving yourself wide open for years of misery.

More busybodies don’t want you to have your money

We know that may sound blunt.

But there’s no point sugarcoating this.

You know our view on the actual superannuation system. If you’re below 45, it certainly won’capital t exist in the form that you know this today by the time you retire. And if we’re right about the future of super, it won’t exist at all…even 5 years from now.

If you’re between 45 and 55, there’s probably only a 50% chance that you’ll ever see your super. And if you’re older than 55, but haven’t yet upon the market, you may only have a 75% possibility of ever seeing your extremely.

We’ve taken a lot of flak with regard to saying this, but we say it with good reason. Every day the actual mainstream press reports upon someone else who says that you shouldn’t have access to your super.

Take this particular from the Age:

‘Looking at the recommendations of the Murray inquiry and the findings of the actual 2015 intergenerational report together, the debate more than whether to ban lump sum payments from superannuation is a live problem, said Antoinette Elias, EY Oceania’s mind of wealth and asset management.

‘“The big question is if the government should act to avoid lump sum payouts,” the lady said.’

Ms Elias isn’t the only one in order to back a ban on lump sums. As The Age also notes:

‘[Deloitte’s head of superannuation, Russell Mason] supports the idea of banning access to super balances in a lump sum retirement, so long as the reform is well-implemented and an exemption is defined in place for people with small amounts.’

If you still don’t think they’re coming to take your super, awaken. It’s happening.

That’s why you ought to create alternate sources of earnings. Odds are your super won’t be there when you retire. The government will nationalise it and then pay you a pittance as a pension.

Plans D through H

So if superannuation is your ‘Plan A’, forget about it. What about Plan B? For many people, that means relying on your home as an income source in pension.

Many like the idea of a reverse mortgage loan. The major problem is that the banks is only going to lend you around 20% from the value of the home, because they know that interest fees will eat away in the home’s equity in a short time period.

Alternatively, you could sell your home. However where would you live? Pension home fees aren’t cheap. And is that somewhere you really want to go?

What about downsizing? Perhaps. Unfortunately, downsizing from a four-bedroom house to some one-bedroom house doesn’t mean that it will only cost you a quarter from the proceeds from selling your larger home.

Quite often, the difference from a smaller house and a bigger house in the same area is just marginal. That’s usually because of the fact that most of the value is in the property.

We’re not saying that you should completely forget about the potential to use your home being an income stream. But we are saying that it perhaps isn’capital t the best solution that most individuals think.

So, what are your solutions?

This is the importance of creating several income streams outside of your superannuation. Our new income specialist Matt Hibbard is all over this.

As part of the launch of his new investment advisory, Total Income, Matt has pinpointed six potential earnings streams for investors to look at now (if you like, these are plans C through H).

Keep adding those income streams

The bottom line is that, along with interest rates at record lows and expected to stay there for a long time, you need to completely rethink what it means to earn a passive income.

It means making the most of your ‘active’ income (income), and even looking at the potential to work with longer, or part time, or perhaps in contract work…or even doing local ‘odd jobs’ for cash.

If you can find an ‘active’ income that you enjoy performing, great. Not only will it provide you earnings, but it will keep you energetic and keep the ‘grey matter’ ticking over.

But we also know that you don’capital t want to work forever. You want to enjoy your life in retirement. That’s why it’s vital that you have a reliable, steady, and sustainable passive income.

Start small. Create one income stream. After that another. And another. Build as many as you can comfortably manage.

This is important. Remember everything we’ng told you about the future of superannuation — there isn’t any future to superannuation. Start building those passive income streams now.

Cheers,
Kris