15 Ways to Boost Your Retirement Income This Year

Many people worry about falling short on retirement income later in life. If that's a fear of yours, here are some steps you can take this year to set yourself up with more money as a senior.

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The more money you're able to put into your 401(k) or IRA, the more flexibility you'll have to take withdrawals later in life. Even if you can't max out this year's 401(k) or IRA, you can aim to boost your savings rate from 2021.

If you're 50 or older, you're allowed to make catch-up contributions in your retirement plan. It pays to do so in order to secure a higher income stream for your senior years. If you have an IRA, your catch-up amounts to $1,000. With a 401(k) plan, it's $6,500.

If you have an employer who will match some of your 401(k) contributions, it pays to put in enough money to snag that match in full. That extra cash could allow for more generous withdrawals when you need them.

ALSO READ: Made This 401(k) Mistake in 2021? Avoid It in 2022

Investing your 401(k) or IRA aggressively could help it grow faster. And to that end, it pays to load up on stocks. Though stocks are more volatile than bonds, they tend to deliver higher returns. You can choose individual stocks in an IRA, but with a 401(k), you may want to focus on passively managed index funds that track stock-specific indexes.

By funding a Roth retirement plan, as opposed to a traditional one, you'll lose your immediate tax break on contributions. But what you'll gain instead are tax-free withdrawals during retirement. The result? More income for you to enjoy as a senior.

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If you're enrolled in a high-deductible health insurance plan, it pays to participate in a health savings account (HSA). You can invest HSA funds you aren't using immediately and carry that money into retirement, at which point it can serve as a means of paying for healthcare expenses. Furthermore, once you turn 65, you can take penalty-free HSA withdrawals for any purpose.

Holding dividend stocks is a great way to boost your retirement income. While it pays to reinvest your dividends during your working years, in retirement, you can cash out those dividend payments and use them to pay your living expenses if needed.

ALSO READ: 3 Best Dividend Stocks to Buy With $1,000

Buying income properties is a great way to drum up extra money you can save or invest for retirement. Just as importantly, over time, homes have a tendency to gain value. And so if you buy an income property now and rent it out for many years, by the time you retire, you may be able to sell it at a nice profit and use your sale proceeds as added income.

If you want to invest in real estate but don't love the idea of owning physical properties, real estate investment trusts (REITs) are a great alternative. REITs are another great way to secure dividend income that could come in handy once you're no longer working.

If you have space in your home you're not using, like a finished basement or garage, converting it to a rental unit could produce a steady income. You can, in turn, save and invest that money so it's there for you in retirement. Furthermore, you can continue renting out part of your home as a senior and use the money your tenants pay you to cover your own costs.

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The higher your income during your working years, the higher a Social Security benefit you stand to collect. You can boost your income by growing your job skills, fighting for raises, or getting a second gig on top of your main job.

Once you turn 62, you have the option to sign up for Social Security. If you've reached that age but are still working, hold off on claiming your benefits. The longer you wait (up until age 70), the higher a benefit you stand to receive throughout retirement.

The great thing about municipal bonds is that the interest they pay is exempt from federal taxes (and sometimes state and local taxes as well). That interest is money you can save and reinvest while you're working, and then use as income once your career wraps up.

ALSO READ: Here's Why Municipal Bonds Belong in Every Investor's Portfolio

Corporate bonds don't offer the same tax benefits as municipal bonds, but they commonly offer higher yields. Therefore, it pays to consider adding some to your portfolio and holding them in retirement. They could end up serving as a steady income source.

Starting a business of your own could offer you a chance to grow your earnings and take advantage of different retirement savings tools, like a SEP IRA, which comes with higher contribution limits than a traditional or Roth IRA. Furthermore, if your business is successful and enjoyable, you might choose to maintain it during retirement and benefit from the money it provides you with.

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Presented by Motley Fool Stock Advisor
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There are several moves you can make this year to set yourself up for a more financially solid retirement. Think about your long-term goals and what you want your senior years to look like, because that alone might inspire you to check more of these items off of your list.

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