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Drop in retirement income:6 avenues to explore to compensate for it

Drop in retirement income:6 avenues to explore to compensate for it

Retirement is always synonymous with a drop in income. The latter can in fact be 30% to 50% lower than during working life, depending on the case. This difference in income can be compensated by anticipating certain decisions well before retirement. Once retired, there are also opportunities to significantly improve your income.

1 - Think about saving during your working life

When you are still in business, you do not necessarily think of anticipating the drop in your income which will inevitably happen once you retire. It's true that as an employee or self-employed person, the priority at that time is more to live from day to day, to raise your children, to acquire real estate, etc.

However, one of the means of compensating for the drop in one's future income once retired is to anticipate well in advance, in particular by building up savings which will constitute a significant additional resource once one's working life is over.

The popular retirement savings plan (Perp) is one of the savings products that allows you to save over the long term and to receive a life annuity on retirement, that is to say an amount that is paid periodically until the death of the beneficiary, but also a lump sum if this option is offered to you. The Perp is offered by banks, insurance companies, provident organizations or mutual insurance companies.

The retirement savings plan (PER), which can be subscribed individually or within the framework of one's company, is also a way of putting money aside throughout one's working life and benefiting, in most case, the payment of an annuity and/or the recovery of a capital which makes it possible to compensate for one's retirement income.

As an employee, your company can offer you a group retirement savings plan (Perco) which also allows you to benefit from your savings once you retire.

Life insurance is also a good way to compensate for the drop in retirement income. In return for the payment of premiums, you can thus benefit from a lump sum or an annuity at the end of your contract and often until your death.

2 - Combine retirement and employment

To increase your retirement income, you have the option of returning to work and being paid while continuing to receive your retirement pensions.

Certain conditions must nevertheless be met in order to hold a job and continue to receive the full pension. It is necessary to be eligible for all basic and supplementary pensions and to fulfill the conditions of age or duration of insurance which allow entitlement to a basic retirement pension at the full rate of the scheme. general.

Without these conditions met, however, you have the possibility of combining a job and your retirement, but your pensions are then paid only partially.

3 - Offer your services

Without reintegrating a salaried job in a company as during your working life, once retired, you can offer your services to individuals for remuneration, more or less high depending on your activity and the time you want to devote to it. , which compensates for the drop in your income.

Depending on your hobbies, your passions, etc., you have for example the possibility of offering your services to keep pets during the absences of their masters at your home, especially if you have a garden, or at the owners of animals. , for a day or for longer periods.

Why not also offer a few hours of tutoring if you think you meet certain essential conditions for this type of service?

Retirees are also very popular with parents to look after their children. Becoming a nanny after retirement can also be a good way to compensate for the drop in income after retirement.

4 - Renting a property

If you are lucky enough to own, renting out one of your properties is a good source of income to improve your retirement.

On the other hand, many retirees often find themselves in a house that is too big when all the children have left the house. In this case, see if you have the possibility of renting a room or an independent part of your home to students for example. Demand is high in this area, you will certainly have no trouble earning a significant income when you retire.

5 - Selling your property as a life annuity

If you are an owner and want to increase your income once you retire, you can decide to sell your home for life.

This procedure does not allow you to receive the amount of the sale of your property all at once, but to benefit every month from the payment of an annuity from the buyer, until your death. This lump sum of money defined in the deed of sale thus supplements your retirement pension regularly. In addition, you have the possibility of continuing to live in your house even if it is sold as a life annuity.

6 - Find out about your eligibility for financial aid

For the most modest retirees, it is possible, provided they meet certain conditions, to benefit from allowances which make it possible to supplement their income once they retire.

This is the case, for example, of the Solidarity allowance for the elderly (Aspa) if your resources do not exceed certain ceilings detailed on the general scheme retirement website. The amount of the Aspa is €907 per month for a single person, €1,408 for 2 people and it is possible to combine this allowance with your retirement pension or with income from a professional activity.

If you are recognized as disabled, the supplementary disability allowance (ASI) can also compensate for the drop in your retirement income. Its amount is €416 per month for a single person, €686 for a married couple. To benefit from it, your income must also not exceed certain ceilings.