10 Ways to Pay for Retirement

Stocks or stock mutual funds. Just over half (53 percent) of workers plan to keep some money in the stock market to help finance their retirement years, down significantly from 63 percent in 2007. Only about 42 percent of retirees say they receive income from stocks or stock mutual funds. "You need some growth component in your portfolio, such as individual stocks or mutual funds," says Robert Aylin, a wealth manager for PrairieView Partners in St. Paul, Minn. "We think it's pretty important for most people to have equity or stock exposure to be able to preserve their buying power."

Annuities or insurance plans. Interest in annuities and insurance plans as a way to pay for retirement is declining among workers, from 44 percent in 2007 to 34 percent in 2012. Just under a third (31 percent) of retirees are using an insurance product to help fund their retirement years. "You can take a lump sum that you have saved and create a contract with an insurance company and guarantee an income that you are never going to outlive," says Aylin. "Having that fixed income every month that you know will always be there can be a real added value."

Rent or royalties. Just over a quarter (27 percent) of workers are creating works or buying property that they hope will provide them with an additional stream of retirement income. And 19 percent of retirees say they are currently receiving rent or royalty payments.

An inheritance. Some 15 percent of retirees are financing their lifestyle with the help of an inheritance. And just over a third (34 percent) of workers are hoping that inherited funds will help them pay for retirement. But pinning your retirement hopes to inherited funds is not a solid strategy. "There could be health issues that could cause that inheritance to be wiped out by medical costs," cautions McAlmond. "There is no way you can be absolutely sure what you will be inheriting."

Twitter: @aiming2retire

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