Boost Your Retirement Income in 3 Steps
Low interest rates are a big challenge for retirees today. To help cope, try these three strategies.


A long time ago in a galaxy far, far away, retirees could live off the interest from their CDs and bonds. A lot has changed since then. With interest rates now at historical lows, retirees are feeling the pinch.
This doesn’t mean retirement is out of reach. Only we need to plan a little smarter and harder.
Here are three examples of how to boost retirement income.

Sign up for Kiplinger’s Free E-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.
1. Start with reducing your expenses.
My clients make a list of all expenses. Line by line, each expense is then scrutinized. I ask them, is there a way to reduce the expense? Can you live without it or on a smaller scale? Cable bills, cellphone bills, subscription services, all of these add up.
Other expenses are not so obvious. Cash allowances to adult children are a common budget leak. Retired parents need to have a heart-to-heart with their adult children on how their gifts could potentially negatively impact Mom and Dad’s retirement.
Also, review and request insurance proposals for health, home and auto. I usually find new insurance vendors with better offers. Or, if it makes sense, try increasing the deductible. Increasing deductibles can save you money on premiums. This assumes you have the cash to meet the higher deductible when you file an insurance claim.
If you are still paying for life insurance, does that still make sense? If the mortgage is paid off and kids out of college, perhaps reallocating premium dollars to long-term care insurance might make more sense.
2. Next, find ways to reduce your taxes.
Scour your income tax returns for leakage. Are you offsetting income with losses? Taxpayers can use $3,000 of investment losses – if a stock or mutual fund lost money – against ordinary income. If you give to charity, are you giving in the most tax favorable way? Donating a high-flying stock may make more sense than giving cash. Donating stock to a qualified charity gets you out of the stock position without incurring taxes from selling. This way your cash, which you would have donated, is instead preserved for your living expenses.
For those with consulting or self-employment income, are you saving in a tax-favorable retirement account? Contributions to a Self-employed (SEP) IRA are tax-deductible, reducing your taxable income and increasing savings for future retirement needs.
3. Focus on total portfolio income.
Many retirees have interest and dividends reinvested back into the portfolio. Instead, try having all portfolio income paid out to you. Each week my retired clients receive a physical check or a wire to their bank account from the interest and dividends generated from their portfolios. The advantage is clients never touch their principal. The downside is the portfolio may not grow as much if dividends were reinvested. That is a trade-off. Many retirees prefer to take the income instead of touching principal.
The key to all of this to understand is that the old way of retirement income planning – company-provided pensions, high-interest CDs or working longer – is unfortunately not as reliable as it used to be. Today, retirees must work a little smarter and harder.
If you are feeling uncertain about your retirement income plan, I encourage you to speak with a qualified, experienced financial adviser. Sometimes the answers are right in front of clients, they just need someone to help point them out.
Investment advisory and financial planning services are offered through Summit Financial LLC, an SEC Registered Investment Adviser, 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax. 973-285-3666. This material is for your information and guidance and is not intended as legal or tax advice. Clients should make all decisions regarding the tax and legal implications of their investments and plans after consulting with their independent tax or legal advisers. Individual investor portfolios must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investment time horizon, tax situation and other relevant factors. Past performance is not a guarantee of future results. The views and opinions expressed in this article are solely those of the author and should not be attributed to Summit Financial LLC. Links to third-party websites are provided for your convenience and informational purposes only. Summit is not responsible for the information contained on third-party websites. The Summit financial planning design team admitted attorneys and/or CPAs, who act exclusively in a non-representative capacity with respect to Summit’s clients. Neither they nor Summit provide tax or legal advice to clients. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local taxes.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Michael Aloi is a CERTIFIED FINANCIAL PLANNER™ Practitioner and Accredited Wealth Management Advisor℠ with Summit Financial, LLC. With 21 years of experience, Michael specializes in working with executives, professionals and retirees. Since he joined Summit Financial, LLC, Michael has built a process that emphasizes the integration of various facets of financial planning. Supported by a team of in-house estate and income tax specialists, Michael offers his clients coordinated solutions to scattered problems.
-
Ten Cheapest Places to Live in Texas
Property Tax Looking for a cheap place to live in Texas? Look no further. These counties have the lowest property tax bills in the Lone Star State.
-
AI Is Missing the Wisdom of Older Adults: What It Means for You
AI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or Relocate
Homeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and Friends
What starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
What the HECM? Combine It With a QLAC and See What Happens
Combining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.
-
721 UPREIT DSTs: Real Estate Investing Expert Explores the Hidden Risks
Potential investors need to understand the crucial distinction between a REIT's option to buy a Delaware statutory trust's property and its obligation.
-
I'm an Insurance Expert: Yes, You Need Life Insurance Even if the Kids Are Grown and the House Is Paid Off
Life insurance isn't about you. It's about providing for loved ones and covering expenses after you're gone. Here are five key reasons to have it.