Retirement options are often viewed in the limits of the traditional pension or 401(k). We are here to tell you that there are other retirement options that you may want to consider. They offer flexibility that traditional retirement accounts and pensions don’t. So, here are several lesser-known retirement options to consider.
Precious Metal IRA
Some people explore the possibility of using precious metal individual retirement accounts (IRAs). One benefit of these is that precious are a hedge against inflation or major economic downturns. But what’s a precious metal IRA? Also, how does a gold IRA work?
A precious metal IRA is a self-directed retirement account that allows you to buy gold, silver, and other assets. These investments could offer some protection if the economy takes any significant hits. In addition, such plans allow you to benefit from the commodity’s appreciation without having to actually sell it. This means that if you decide to take distributions from your account, you can do so in a way that the precious metals aren’t taxed as ordinary income.
In fact, some people have even suggested using precious metal IRAs as a way of getting around possible regulations that could make it harder for individual investors to perform trades on their own.
Although precious metal IRAs are gaining popularity, they’re not usually the first thing that comes to mind when the topic of retirement income is brought up.
Roth IRA Conversion Ladder
Roth IRA conversion ladders provide significant tax benefits to people nearing the age of traditional retirement while allowing them to maintain control over their money.
You can do so by converting traditional IRAs into Roth IRAs. A benefit of doing this is that you will not need a large sum upfront. Plus, this strategy can provide tax-free funds to beneficiaries when one passes away. All you need in order to start is your age in dollars (in other words, multiply your current age by how much you think you’ll need).
Keep in mind, however, that when someone converts their traditional IRA into a Roth IRA, there are some significant restrictions in place. For instance, you cannot proceed with any conversions if you are over 70.5 years old. As a result, the individual will need to withdraw money from their traditional IRA if they wish to avoid penalty fees.
The Roth IRA conversion ladder lets you withdraw from your traditional IRA and transfer the amount to a Roth IRA. You can accomplish this in easy-to-manage intervals over time. Following this process will help you maximize your return on investment. Plus, it will give you the opportunity to rethink where that money should go.
Not many people think of reverse mortgages as being for the elderly who no longer have income or savings. However, there are several benefits to using these types of accounts even when one is still working. One is that you and your spouse can remain in the home regardless if one spouse passes away.
Also, there are no use restrictions on who can inherit the house or how you use it. If you have an extra room or basement apartment, rent it out! You may be able to earn rental income while getting income from the reverse mortgage.
These types of accounts may provide retired individuals with significant peace of mind. This is important given their shifting needs and the short amount of time left before they pass on.
Donating To Philanthropic Organizations
Although it might not seem like the most conventional idea, some people donate money to charitable or philanthropic organizations to help them in retirement. Hopefully the main reason people do this is that they want their money to go to a good cause. An added benefit is that you may be eligible for a tax break. This type of donation does offer a few advantages over the average contribution.
For example, not only can donors potentially claim a tax deduction, but they’ll also be able to write off other qualified expenses such as transportation and lodging. On top of that, the donor will only pay tax on the income generated by their donated assets. They will not need to pay taxes on any contributed principal.
Lesser-Known Retirement Options to Consider – Summary
When considering the options available to retirees, it’s easy to fall into a mental rut. Many times the focus is only on the more obvious choices such as 401(k)s and annuities. But your options shouldn’t have to be that limited.
If you’re like most people, one of your biggest concerns is ensuring that your retirement savings are protected against market volatility. Fortunately, there are plenty of investment vehicles that can offer you exactly that.