Creating Multiple Income Streams in Retirement
Your cost of living will surely be going up. Make sure that your cash on hand keeps pace.
Imagine if I handed you a $50 bill to go grab a soda, and you came back to me with only $5 in change. That would seem outrageous, wouldn’t it?
Well, we all laughed when Doc Brown did exactly that with Marty McFly in Back to The Future II when they had just arrived in the year 2015 from 1985.
We all got the joke. Prices go up over time, even for sodas.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
We’re only weeks away from the exact date, Oct. 21, 2015, when Doc and Marty traveled forward in time. So let’s pause to ponder what our own futures will look like 30 years from now. The cost of living will continue to go up, hopefully not at that extreme rate, but what can we do now to prepare ourselves financially?
Those reaching retirement age now (Baby Boomers born between 1946 and 1964) have enjoyed some corporate perks over the last 30 years that aren’t as common among the GenX and GenY workers today.
When Marty went 30 years back in time to 1955 in the first Back To The Future movie, many residents of Hill Valley (the fictitious town from the movie trilogy) likely had access to a pension (also known as a defined-benefit plan) from their employers. Upon retirement, a monthly income would be paid out for the rest of their lives. That amount varied according to their years of service and levels of annual income while working, but nonetheless it was something that they could count on and they could budget against in their future spending.
Nowadays, pensions are mostly gone, unless you have had a career as a teacher or government worker. So my generation and future generations must look to build multiple income streams in retirement that could include the following:
Dividend-paying stocks: Adding dividend-paying stocks, or funds, to your portfolio is a simple way to bring in additional income. Many companies have a long track record of returning a portion of their profits to their shareholders on a quarterly or annual basis. Make sure if you are trying to keep the distributions as cash that you are not reinvesting the dividends, as sometimes that is the default choice at purchase.
A part-time job: A part-time job might not just offer income, but may be something you want to do after leaving your full-time career. Perhaps you always wanted to teach and just never had the time? Or if there is an age gap between you and your partner, you might fill in some of that time before they retire, too.
Rental properties: When the kids have left the house and you feel like scaling down your home, instead of selling it, you could rent it out. If your old home is in a desirable neighborhood, the rental income could be greater than your new housing costs over time.
Fixed or deferred annuities: Annuities can be designed in multiple ways, but for the purposes of this conversation, think of them like a pension replacement (for those that don’t have one). You can convert some of your savings now into a future income stream that you cannot outlive. Another example here is essentially how Social Security was designed to work.
In order to determine which combination of income streams will work for you, begin with an analysis of your predicted spending in retirement. Working with a financial professional, they can plug this data into planning software programs to predict cash-flow scenarios with different estimates of annual inflation.
If there are shortfalls, now is the time to see how some of these income strategies will affect your plan. You also might find out if you can continue to enjoy your twice-weekly double espresso in the year 2045--when it costs $100.
Kevin Kaplan is a partner at Silicon Hills Wealth Management in Austin, Texas. He is passionate about photography, travel, pizza and live music.
-
The Top 10 Side Gigs For Retirees In 2026Money is freedom in retirement; here’s how to earn more of it with a profitable side gig
-
3 Retirement Changes to Watch in 2026: Tax EditionRetirement Taxes Between the Social Security "senior bonus" phaseout and changes to Roth tax rules, your 2026 retirement plan may need an update. Here's what to know.
-
The 'Yes, And...' Rule for RetirementRetirement rarely follows the script. That’s why the best retirees learn to improvise.
-
What Not to Do After Inheriting Wealth: 4 Mistakes That Could Cost You EverythingGen X and Millennials are expected to receive trillions of dollars in inheritance. Unless it's managed properly, the money could slip through their fingers.
-
'The Money Prism' Solves Retirement Money's Biggest Headache: Here's HowThis simple, three-zone system (Blue for bills, Green for paycheck, Red for growth) helps you organize your retirement savings by purpose and time.
-
No, AI Can't Plan Your Retirement: This (Human) Investment Adviser Explains WhyAI has infinite uses. But creating an accurate retirement strategy based on your unique goals is one place where its possibilities seem lacking.
-
Don't Let a 60/40 Portfolio Derail Your Retirement: Why a Cookie-Cutter Approach Could Cost YouChoosing a personalized retirement investment plan, rather than relying on the 60/40 portfolio, could help protect your savings and ensure long-term growth.
-
Are You Winging Your Retirement Plan? A Wealth Adviser's Tips to Help Build Wealth and Navigate RiskIf you have no strategy tying together your accounts or haven't modeled scenarios to make sure your savings will last, then your plan is probably inefficient.
-
Divide and Conquer: Your Annual Financial Plan Made Easy, Courtesy of a Financial AdviserOverwhelmed by your financial to-do list? Split it into four quarters and assign each one goals that connect to the time of year. It could be life-changing.
-
High-Income But Low Confidence? This 5-Point Plan From a Financial Planner Can Fix ThatHigh earners can still feel they're on shaky ground financially. Rebuild your confidence with a plan that understands your present and protects your future.
-
3 Investment Lessons From 2025 to Help You Ride Out Any Storm in 2026Investors can use the past 12 months to guide their strategy for 2026 — and 2025 was living proof that time in the market can pay off.
