Post A Comment
It is obvious as a punk rocker at the Symphony that regardless of when you retire; you will still need money to support your life style. Some people will live frugally; others wish to live in grand style. In the end, we’ll all need to find a source from which we can withdraw cash on a monthly basis.
While we will look in depth at each of the sources of income at retirement, this article has been written in order to draw a chart of these resources. It can help you design a retirement plan. Before calculating how you much you will receive from your different income sources, you must know what they are.
Government Pension
Depending on which country, state or province you live in, a government provided pension at retirement may vary. In Canada for example, we have the federal pension plan in addition to certain provincial pension plans. Some of them were created so they become a source of income at retirement for everyone while others you must have contributed to in order to have the right to withdraw money.
Pension Plan
Your employer might give you the opportunity to contribute to a pension plan. The growth of this account is tax sheltered and could represent an interesting source of income at retirement. I personally have some of my clients who will depend only on government pensions and their employer pension plan. They most likely work for the government anyway 
At this point, you must remember that there are defined contribution pension plans and defined benefit pension plans. Defined benefit pension plans are the most forgiving of all but are generally offered only by the government and some big companies (while they still can afford it!).
Savings
There are many ways to put money aside while you are working. In Canada, you have the option of contributing to a Tax Free Savings Account (TFSA), a Registered Retirement Saving Plan (RRSP) or in a non-registered account. In the USA, you have the possibility or starting a Roth IRA and a 401(k) account. All of these accounts are good source of income at retirement and will be discussed in other articles.
Rental Property
For those who hate investing on the stock market but are still looking for a stable source of income at retirement, there is the real estate business. While rental properties can provide you with a steady cash flow, it requires time and liquidity (when nobody is paying the rent, you still have to pay the mortgage, taxes and maintain the property in a good shape).
Work
Finally, if you didn’t save enough money and you can’t get much from the government at retirement, you might have to keep on working. Some people decide to open their own business, work as a consultant or work part time to maintain another source of income. If you like your job and want to keep working, this could be a great alternative. However, if you can’t stand you boss and wish that the day would finish, you might want to reread the first 4 sources of income at retirement!
