Retirement savings are essential, but retirement income can level up your outlook.
Retirement would be a lot easier if you could give up the work but keep the paycheck. Sadly, no employer is quite that generous. Most of us need to replace our working income in retirement, so we can stay afloat financially. That income replacement can come from savings distributions, passive income streams, or both.
Passive income is good for retirees
Passive income is particularly appealing for retirees. Here’s one big reason why. When you have cash coming in, you are less reliant on investment liquidations to fund your retirement distributions. Investment liquidations aren’t bad, but they do lower your earnings potential going forward.
Stock liquidations expose you to short-term market fluctuations as well. If the market happens to be down the day you liquidate, for example, you’ll get less value for a position than you’d like.