How to Live a Retirement Lifestyle Without a Employer Pension

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How can you Live a Retirement Lifestyle without any Employment Pension Income? Can it be done?

The simple answer to the above question is 'yes'. Let me explain in detail and I will start with the not so good news first. 

In a recent study, by author Richard Shillington ( I live in Canada), he states that only approximetly15 to 20 percent of middle-income Canadians are retiring without an employer pension plan, have saved anywhere near enough for retirement.

What that means is that people aged 55 to 64, will face a dramatic drop in their standard of living in retirement, and many will spend their senior years below the poverty income level. He also states that less than 50% of Canadians currently have no employer pension, and even fewer younger workers today have employment pensions.

Canadians within 10 years of retirement are supposed to be at their peak savings years, socking away money for retirement, but Shillington found the median value of retirement assets of Canadians age 55 to 64 is just over $3,000. Keep in mind that savings, meant for retirement, is supposed to be used to supplement a retirement pension.

Now, to be clear, what amount of income you would need to live a "retirement lifestyle" would be determined by you. It would depend on outstanding debt, monthly costs etc. Also, I am not a financial advisor or lawyer... full disclosure. I am a mid-50's business guy, with no other pension funds other than the set Government one, who did some soul-searching and research to determine what options were available to me.

Here is where I share some positive news and options available to people who do not have an Employer pension to fall back on in your chosen retirement years.

Savings- Government sponsored savings programs live RRSP's (Canada) , IRA's (USA), or other accounts that give you the benefit of a tax saving or deferred tax advantage. Even into your 40's and 50's, you still have time to invest in savings. You will obviously need to put away more cash that your earlier years but it could be done. You then take out the month amount needed and pay tax on that specific amount at the time of withdrawn vs. the full amount in the fund.  

Home Equity converted to income
- Another option is to 'cash-out' your home equity (sell your home) and put those proceeds into income fund which pays monthly, like an annuity, a certain amount for you to live on. Interest accrues on the lump some and depending on the interest rate and home equity amount, these funds are advanced to you. I believe there is a set time limit but check with your financial specialist to clarify. I guess you could also take the cash and live off principle and interest from a regular bank or financial institution. Maybe not the best option here.

Income suite and Properties- You could build a residual suite in your home and have income from renting it out or rent your own home out for monthly revenue. Investing in properties, fixing them up and renting them could also be an option. You would need some capital up front though for this option.

Reverse mortgage- I don't know too much about this option but you would need to own a home/property that has equity and a lender would do an appraisal and setup what is called a 'reverse mortgage'. It means really get a lump sum or payments based on a percentage of appraised equity. No repayments are required, but interest does accrue, and you pay back the mortgage when the home or property is sold or the estate is settled. Don't know anyone who has actually done this so I can't comment on it personally.

Equity market Investments- Investments over time in stocks, mutual funds , or bonds can grow into a substantial portfolio that can be cashed in and used for income for retirement.

Part-time employment - To supplement your other income or investment revenue, you can get a part-time job in a field that may interest you while still giving you a semi-retirement style of living. I recently met a retired executive who works part time at a Home Building Supply store because he always wanted to do it and loves the personal interaction.

Home based business- This was my choice based on my criteria that I wanted a "Laptop Lifestyle" of being able to build a business from home or where ever I had a wifi connection. I could work the hours I wanted (obviously more in the beginning) and eventually have steady income from affiliate programs I was endorsing ( kind of like me telling people of a great product in bought on Amazon or other retailer, providing a link so others to review and buy, and Amazon sends my a 'thank you' from those sales). I also wanted a residual income stream coming from work and effort I had put into the business earlier, that would pay out on a consistent basis. This would allow me to lower the amount of effort and time required so I could actually enjoy my retirement life. As this is a new journey for me, I am very pleased with my decision and can see this was the best choice for my wife and I

I have been blessed over the years to have had an entrepreneur spirit within me, so taking calculated risks has never been an issue for me. Your situation may be totally different than mine but I hope you agree that just because you find yourself without a set pension from your employer, shouldn't restrict you from pursuing a lifestyle that you have always dreamed of.

Larry J Clark
Digital Marketing Entrepreneur and Business Mentor
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