Using cash savings accounts to provide your income can provide a much-need level of security because you know your capital is safe and easily accessible. The risk is that, once you’re retired, you’re not likely to be able to build it up again if you lose money. The drawbacks is that the income and capital won’t rise with the inflation, so as the years go by your spending power will gradually fall.
Some individuals, particularly those who do not have traditional pension policy (opting to have alternative savings such as properties or even just simple savings accounts), may decide to invest some of their capital in alternative investments to give them an annual or even monthly return. There are many different ways of doing this and the number is increasing with the introduction of more and more savings options. It is a good idea if you can commit to it so you can get a regular monthly, tax-free income — and also get capital growth. If you have saved a cash sum that you do not require to leave off at this point in time, you could move all or a significant amount of it into income-paying funds.
Another option that many find offers both financial and personal benefits is to actually seek another job in retirement, but doing so based primarily on the sort of job you would enjoy doing, whether this is as simple and small as working in a small cafe or just working part-time at a local shop. The key is to find something you can enjoy because obviously you want to have an enjoyable retirement but this small additional wage which may not normally be enough to live off, when added to your pension allowances – even if all that is is the state pension – you start to see a more rewarding total monthly income. The best part of this option is that earning this money is not the only benefit, you also benefit from meeting new people, chatting to customers and being in an enjoyable environment where you can spend some of your own free time.
It’s important to take into consideration all the options available to you and consult qualified professionals, to ensure that you do not end up losing your original capital in search of a greater monthly return on your investment.