Retirement: Don’t Get Forced Back Into Work

Co-produced with Treading Softly

You’ve finally made it! By choice or by force, you’re out of the workforce and enjoying your retirement. You’re collecting Social Security, and trying to balance your new lifestyle with your finances.

Along comes some storms, as they do in life. Record levels of inflation. A bear market. Threats of recession.

“Did you see the price of gas?!” You think to yourself. “My grocery bill keeps climbing!” you mutter frustratingly when leaving the grocery store. Even your power bill is climbing, especially if you’re a Florida Power and Light customer – what might be good for NextEra Energy (NEE) shareholders is turning into a massive financial burden for millions of Floridians.

Soon you look at your budget and realize you’ll either need to start pulling more from your already heavily down 401(k) balance, or you’ll need to start skipping meals. In 7 months, Social Security will give you a cost of living increase. That is real helpful today.

Your retirement sucks, to put it mildly.

You’re not alone, a staggering 3.2% of retirees of last year are already being pushed back into the workforce, that’s about 1.7 million people. The Federal Reserve predicts another 2.5 million were sent into retirement unprepared and may be pushed back into the workforce.

This trend is accelerating, with more Americans being unprepared for retirement than ever before, combined with record levels of inflation making living on a fixed income harder and harder as months roll on.

Getting a Job to Offset the Cost of Living

For many, they don’t hop back into full-time employment. Companies are less willing to hire you, and if they are, they certainly aren’t willing to pay you the premium you commanded at the end of your career. Ex-retirees usually go into part-time employment, often earning far less than their pre-retirement income as a means to cover their bills.

They’re stuck working after celebrating no longer having to do so. I totally understand why they’re doing it. I’d go back to work as well if I couldn’t afford the basic necessities of life.

You can work on avoiding this trend now. If you’re saving for retirement or in the midst of retirement, there are adjustments and steps you can take.

Let me introduce you to my unique Income Method.

The Income What Now?

Let’s talk about some foundational ideas for a moment.

We assign “value” to everything, don’t we? There is a couple of types of value we might assign. We can call them intrinsic value and market value.

Look at your home for a second, it is likely filled with all your memories, and possessions and provides countless benefits – like keeping you dry when it rains or warm in the winter! That’s its intrinsic value. The sum of all its benefits and what it is worth to you.

When I look at your home, I look at it and consider what I’m willing to pay to buy it from you. I am not burdened by your memories or your perceived benefits. I have my own reasons and motivations to potentially buy your home. That figure is its market value, the value assigned by others.

This is often why when you watch shows like Pawn Stars, the clients massively overvalue their objects. They want to get their intrinsic value when the buyer is looking to get it slightly below market value, to in turn sell it for a profit later.

When I look at the market, I look at it differently than others. I look for income and assign a higher value to holdings that pay me over those that do not. As such, if a stable company is paying me an excellent dividend and others decide to sell off their shares and cause the price to drop. I do not follow them simply because the price declined. Like the homeowner who doesn’t sell their own when its market value dips for a month or for years, I am enjoying the value of the benefits others have discounted.

My investments pay me. That pay keeps me warm in the winter, and cool in the summer.

Make Your Portfolio the Home of Your Retirement

Many have holdings that do not pay them dividends and are hoping to live off of selling their portfolio piecemeal. Instead of doing this, use this bear market to reorganize your portfolio. It requires a shifting of mindset and priorities.

Kiss your passive index funds goodbye and say hello to individual preferred securities, CEFs, and pass-thru entities.

You need the income now, not slow capital gains (which vanish just as quickly as the market turns) with paltry dividends. So get invested in investments that will provide you income now.

By investing for income, you can start unlocking the potential of your portfolio to be an income-producing engine for years to come.

Buying income is actually exceptionally defensive. How so? Your dividends keep coming in good times, and bad. So you don’t need to fret about the market’s daily gyrations to time your exit. You sit back and collect dividends, reinvesting what you want to keep growing your income stream.

Month after month, quarter after quarter, your dividends rain in. Providing a new source of income that makes paying those bills easier, making the grocery store trips easier, and making your budget larger.

We provide free many articles to the public with high-income investing ideas. Those are great places to get started if you’re wanting to become an income investor.

Conclusion

Unretirement. Flipping the switch and being pushed back into the workforce. For many, it’s the ultimate failure in their retirement plans to have to work again.

You spent decades working, so you wouldn’t have to in your golden years, yet here you stand on the edge of being forced back into working again.

You have options to help you avoid this situation. Investing for income before retirement will allow you to accurately predict how much income you’ll generate from your portfolio. For those in retirement, you will be amazed at how much more income your portfolio can produce via income investing instead of selling off pieces and parts of your portfolio.

I don’t want anyone to have to return to work unless you want to. For some, working is a pleasurable activity they do to stay busy – if that’s you, go for it! If you want to launch a second career doing something you truly love every single day, welcome to my life! For those who don’t want to return to work, income investing might be the answer you’re looking for!