You are now ready to reap the fruits of your labor for the last 40 years. But before you decide to splurge your retirement money on your dream cruise, consider that you can actually grow it to see you through a lifetime. If you want a consistent influx of money that your children will enjoy, consider investing it in various avenues.
First, let’s take a look at what retiree earns, and spends for, in a year.
The Bureau of Labor Statistics found in 2016, the average annual spending of households over 65 is $45,756 per year. Expenses come from housing, transportation, health care, food, personal insurance, cash contributions and entertainment costs. The biggest chunk is housing – they can be paying a mortgage, renting or currently in a nursing home. In South Ogden, Utah for example, rates can start from $1874 a month. In Tampa, Florida, costs start at $2650. Entertainment was seen the least costly expense.
The median income for households aged 65-69 is $53,951 per year. Retirement income comes from your Social Security, pensions, work after retirement pay and veteran’s benefits.
You now have $8,195 in annual savings in your hands. Let’s take a look at where you can invest your retirement money.
Own a Franchise
Franchises are an easy way to invest. Put capital on a reputable venture, own a store, run it. Here are some franchises you can own for less than $10,000:
Buildingstars (commercial cleaning company) – Initial investment: $2,245. Buildingstars says franchisees can earn gross incomes of up to $5,000 a month.
Cruise Planners (travel agency) – Initial investment: $2,295. Cruise Planners have an A+ rating with the Better Business Bureau and have been consistently ranked #1 by the Entrepreneur Magazine.
Jazzercise Inc. (fitness franchise) – Initial investment: $2,405. Today, Jazzercise has 7,800 outlets across 50 states and 32 nations.
Buy Rental Property
Consider buying a commercial or residential property and renting it to others. Property rentals are a good source of passive income as it requires little management. You can use services like AirBnB and offer short-term stays.
If you are planning to mortgage the property, make sure your rental income covers both for your mortgage and the profit. The U.S. Census Bureau found in 2017, rental properties can generate 31 percent of the landlord’s annual income.
Exploit Your Passion
If you want something that bears your own name, why not make a living from the things you love?
Colonel Harland David Sanders was 65 years old when he began Kentucky Fried Chicken (KFC). Today, KFC is one of the most widely recognized brands worldwide regardless of industry. Take this as an opportunity to share your passion. If you’re into baking, why not open a small bakery? If you love cooking, why not open a canteen?
Artists who paint, crochet and sculpt can sell their artwork on Etsy. Pet lovers who have extra time can offer pet services in DogVacay.
Owning a franchise, setting up rentals and exploiting your passion are just some of the ways you can grow your hard-earned retirement income. With the right mindset and correct investment avenues, you can still generate income even after retirement.