There comes a time in every person’s life when retirement goes from some vague, meaningless concept to a fast-approaching reality. Saving a little more from your paycheck each month and hoping for the best usually isn’t enough to cover everything. Now is the best time to start reviewing reliable revenue stream options to implement after your regular working days conclude.
Revenue Stream Options With Steady Monthly Payouts
Read on for three revenue stream options that could help maintain your lifestyle after reaching your full retirement age.
Option 1: Invest In A Rental Property
If you’re interested in steady monthly revenue stream options, look at local rental properties currently on the market. A rental property can generate steady monthly income while your underlying assets appreciate over time, providing twice the financial security. However, this option isn’t a slam dunk for everyone looking for passive revenue stream options during retirement. Keep in mind that investing in a rental property (or properties) comes with a lot of responsibility. As an owner, your responsibility could manifest itself as a middle-of-the-night phone call involving plumbing issues or a broken furnace. Basically, this revenue stream option’s for people who want to be personally involved in day-to-day property maintenance on their investment. In other words, it may require some manual labor.
It’s also important to consider how you’ll deal with your tenants. How do you handle things when they don’t pay rent on time? Can you see yourself starting eviction proceedings? Rental properties can provide you and your family with a very comfortable retirement lifestyle. But before you look at any properties, talk to people who’ve done this already — and listen carefully to their advice. Unless you’re comfortable paying a rental management company, explore other revenue stream options to carry you through retirement.
Option 2: Consider Oil & Gas Investments
If you invest oil and gas in your 40s or 50s, it can be a great way to defer taxes now. Plus, you can write off up to 90% of your total investment amount over a seven-year depreciation period. This kind of investment then generates monthly income for potentially 30+ years once your well produces oil or gas. From a tax perspective, oil and gas investments are smart retirement revenue stream options.
Since oil and gas drilling is risky, the SEC requires investors for many energy extraction partnerships be accredited. This revenue stream option is worth exploring in more depth because no other U.S. investment category enjoys the number of tax breaks available.
Option 3: Purchase An Annuity
In the past, annuities got a bad reputation. Regardless, several key reasons make annuities attractive as retirement revenue stream options. Fixed-rate, immediate or deferred annuities deliver the same monthly income amount for a pre-set time period. In this way, annuities are similar to purchasing CDs from your bank. Issued by insurance companies, these convenient and predictable investment vehicles generally pay a higher interest rate than CDs. What’s more, this monthly income’s likely to last until the end of your life. According to CNNMoney, annuities offer three key advantages:
- Unlike the more volatile stock market, annuities pay a guaranteed interest rate.
- They have low investment minimums (usually between $1,000 to $10,000).
- You won’t pay tax on the interest until after you withdraw the money.
Unfortunately, annuities also come with a few disadvantages. After the fixed-rate period ends, your interest rate can drop. And if you try to take your money out early, you may pay some big fees. Perhaps most notably, fixed lifetime payments generally don’t keep up with the inflation rate. Annuities are best for investors who want stability and a plan for covering certain fixed expenses throughout retirement.