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As you get closer to retirement, you’ll have plenty of consequential decisions to make. One of the most critical decisions is how to turn your assets into retirement income.

In this article, we share tips on how you can turn both liquid and illiquid assets into income.

Think about the best time to start taking income

If you’re planning to convert your retirement assets such as 401(k)s or IRAs into income, it’s important to note that most of them won’t allow you to make withdrawals before a certain age without incurring penalties.

Additionally, choosing when to file for social security payments is of great importance. This is because the amount paid will increase over time if you’re willing to wait or it can be collected earlier at a reduced pay out amount.

Talk to your financial adviser to help you make the most of your money as well as benefits -and still meet your need.

Consider Your Portfolio of Non-Registered Investments 

Whether you’ve invested in the stock market, have mutual funds or a segregated fund policy, or own bonds and GICs, these holdings have the potential to provide you with retirement income through dividends, or by selling them as needed.

It is important to strike a balance between maintaining and growing your wealth and protecting against market fluctuations, especially as you prepare for retirement and during retirement. Instead of focusing on both growth and income, a risk-managed portfolio can provide a smoother investment journey to help meet future savings needs.

Make sure you are working with a financial professional to ensure that your asset mix is designed for stability and doesn’t have the volatility you were likely to tolerate when you were growth oriented.

Move into a Smaller Property 

Choosing to stay in your home may have some advantages – you’re hoping it will continue to rise in value, you’re not sure you want to buy elsewhere at current prices, etc.  But may also have some drawbacks, including higher property taxes, a need for maintenance as the home ages, and the possibility that the market may not be as favorable as it is today if you choose to wait.

Consider moving into a smaller house and using the additional proceeds to fund part of your retirement. In 2021, however, it’s not that simple. Many retirees have grown children living with them or want to make sure there is room for their grandchildren to care for on a part-time basis. So, consider your situation.

Rent Your Space 

– Rent other parts of the property – such as your driveway, if parking is in demand in your area, your swimming pool, extra room etc. – Short-term rental income on apps like Airbnb is a great start – whether from single rooms or the entire property if you are in an area where tourists or business travelers may need accommodation

Selling part of your equity in your Home

You can access some of the value accrued in your house over the years. With the option, you essentially sell a small proportion of your house at a discount and the financier keeps the upside on the value when the house is finally sold.

The best part is you don’t pay interest on that and a percentage of the value of the house remains available to you should you need to move to nursing home. Note that such a move has implications, and you should closely consult your financial advisor before making any commitments.

Other assets, such as works of art, cars, collectibles, or other valuables 

It may not be Ferrari or Maserati, but in your lifetime, you may have acquired valuable items – a classic car, jewelry, or a collection of original tape editions. As you approach retirement, you may want to have these items properly valued and consider selling them now (or later) as a supplement to your retirement income. If you don’t need them immediately, consider investing the funds or allocating them to purchase an annuity.

Bonus Tip: Your skills and knowledge

Just because you are retired does not mean that the expertise you have acquired throughout your life is worthless. Many retirees continue to work part time or as consultants, which can be a useful source of income.


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