What’s your biggest retirement fear? If it’s running out of income in retirement, you’re not alone. According to a recent study from Transamerica, the number one fear for Baby Boomers is outliving their assets and running out of income.1 Boomers aren’t alone. Generation X is also projected to be far behind on their retirement savings, with an average balance of only $64,000.2
 
These numbers may explain why 52% of workers expect to work beyond age 65. Among Boomers, that figure jumps to 68% who expect to or are already working past age 65.3
 
Continuing your career into your late 60s or even early 70s is one way to accumulate more savings and protect your retirement income. However, it’s not the only option. Depending on your goals and needs, you may just need slightly more income to reach your objectives.
 
Below are four creative ways to stabilize your income in retirement:

​The sharing economy is based on individuals sharing their own goods and services with others. Uber is an example. Airbnb is another. There are a growing list of websites and apps that allow you to earn money simply by sharing your own goods, such as your car or extra space in your house.
 
Granted, you may not want to drive an Uber around town. However, that’s not the only option. If you’re an empty nester with extra space, you could rent bedrooms to guests. There are some services that let you rent out storage space. There are even services for renting out tools or other useful goods.
 
The best thing about the sharing economy is that you can participate as much or as little as you like. You set your terms, prices and schedule, so it doesn’t come with the commitment of actual employment. Be creative and research opportunities to generate extra income in a way that fits your lifestyle.

​After a career that spanned decades, your most valuable asset may be your experience and knowledge. Why not use that knowledge to generate income after you retire?
 
You could use your industry contacts to become a consultant. Or you could coach or mentor younger individuals in your industry who want your advice. There are plenty of websites that offer a platform to do this.
 
Another option is to talk to your former employer about consulting opportunities. They may want to retain your experience and knowledge and may be willing to do so in a flexible way. Don’t assume that retirement means completely walking away from your career, contacts and experience.

​Do you have life insurance that has a significant amount of cash value? Did you know you can tap into that cash value for supplemental retirement income?
 
You can take withdrawals from your life insurance policy. If you’re withdrawing your own premiums, the distributions are tax-free. If you withdraw earnings, the distributions are taxable.
 
You also may be able to take tax-free loans from the policy, assuming you have enough cash value after the loan to support the death benefit. You repay the loan over time. If you pass away with a remaining balance, that amount is deducted from the death benefit. A financial professional can help you determine if your life insurance makes a good source of supplemental income.

Your concern may not be the amount of your income but rather the certainty of it. You may have to rely on withdrawals from your savings to provide retirement income. Market volatility could make those withdrawals unpredictable. There’s also the risk that you could run out of income if you have a long retirement.
 
One way to minimize those risks is to guarantee your income using a tool like an annuity. You can take up to a certain withdrawal amount every year. Assuming you stay within the policy’s withdrawal limits, your income is guaranteed for life, regardless of how long you live or how the market performs.
 
We can help you develop your retirement income strategy. It starts with an analysis of where you are today and where you want to go. Contact us today at Cornerstone Financial Associates. Let’s connect soon and start the conversation.
 
1https://www.kenoshanews.com/business/investment/personal-finance/these-are-baby-boomers-top-3-retirement-fears/article_b5d4a1e0-f853-5beb-9ce6-392d0bd1aa70.html
2https://www.fool.com/retirement/2020/06/16/gen-xers-are-alarmingly-behind-on-retirement-savin.aspx
3https://www.kenoshanews.com/business/investment/personal-finance/more-than-half-of-workers-expect-to-work-past-65-heres-why-you-should-plan/article_3789fd58-82d9-57c0-bfeb-73900f3cb27e.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20197 - 2020/6/22

Do you have an old permanent life insurance policy that has accumulated cash value? Having an unused life insurance policy isn’t a bad thing. It’s certainly better than the alternative.
 
However, your needs today may not be the same as they were when you purchased the policy. You may have purchased your life insurance when you were younger. Perhaps you had young children in the home or a spouse who relied on you for financial support. Maybe you were still in the early stages of your career and saving for the future.
 
Today, your situation may be much different. You may be nearing retirement with a sizable nest egg. Maybe you don’t have a mortgage or other debt that would be a burden to your spouse if you passed away. Perhaps your children are grown and no longer financially dependent on you.
 
You may feel like your life insurance policy is no longer necessary. Why not surrender the policy and take the cash value?
 
Just because your old policy is no longer needed for its original purpose, doesn’t mean it isn’t useful. In fact, you can use it to achieve other goals, like providing supplemental income, leaving a legacy for family, and more.
 
One effective purpose for the policy is to use it to support your grandchildren’s education. In fact, life insurance can be a flexible, efficient tool to support your grandchildren as they further their education.
 
Tax-efficiency. As you may know, cash value accumulates inside a permanent life insurance policy on a tax-deferred basis. You don’t pay taxes on the growth as long as the funds stay inside the policy.
 
However, you also may be able to take tax-free distributions from the policy. One way to do this is by taking withdrawals. When you take a withdrawal, your premiums come out before your gains. Premium distributions are tax-free. Withdrawals of gains are taxed as income.
 
Another way to take a tax-free distribution is to take a loan from the policy’s cash value. You don’t pay taxes on the distribution, and you repay the loan over time. If you pass away before repaying the loan, the balance is deducted from your death benefit.
 
Flexibility. You can take a withdrawal from a life insurance policy at any time for any reason, assuming you have enough cash value in the policy to support the death benefit. That differs from other college savings tools, like 529 plans, which require you to use withdrawals for qualified education expenses.
 
That flexibility could help you support your grandchildren in whatever way they need. For instance, maybe they need help with tuition, but maybe they need more help with other expenses, like food or rent. Or perhaps you have a grandchild who is charting his or her own path and skipping the traditional college experience. You can use your policy to help them in whatever way you like.
 
Financial aid. It’s always important to check with financial aid professionals before making gifts. However, generally speaking, life insurance cash value belonging to grandparents does not count as an asset on a financial aid application. That means you can support your grandchild without hurting their chances to earn scholarships, grants and other forms of aid.
 
You don’t need to have an existing policy to make use of this strategy. If you’re in relatively good health and have assets you would like to use to support your family, you may benefit from purchasing a new policy. We can help you evaluate your goals and determine the right strategy.
 
Let’s connect today and discuss how you can best help your grandchildren make their dreams reality. Contact us today at Cornerstone Financial Associates and let’s start the conversation.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20196 - 2020/6/22