The are close to 75 million baby boomers already retiring or soon to be retiring. The average retirement savings of these baby boomers is, on the high side, around $80,000. Even with social security kicking in and presumably less fixed costs such as mortgages, college tuition, etc. to pay for that is not much money to live on. Assuming they don’t inherit money many of these boomers will need to supplement their retirement with extra income. Which brings me to the point of this post…
So how would an extra $20,000 per year change their lives? Drastically! Here is what I mean. One of the best ways to earn extra income without working a lot of extra hours is to start a side business from home. Preferably a home-based business that only takes 10-15 hours per week at the most but can earn you at least an extra $1,500 a month income, which is very doable.
The IRS is able to track approximately how much small business owners earn. In 2007 the average home business earned $100,000 after taxes. The average was calculated from the low end of $28,000 per year to $692,000 on the high end. (Read more Here! ) My example of an extra $20,000 per year with a home business is therefore very accurate and at the low end of the scale.
Back to my example…If you invested that $1,500 per month (almost $20,000/year) at an 8% return rate for 10 years you would have$275,000. Not bad at all! What about $1,500 per month for 15 years, $500,000. And if you invested that same $1,500 per month for 20 years you would have almost $900,000.
If you earned the average income of a home business owner in the IRS example above, you would have an extra $8,000 a month or so to invest ($100,000 a year). $8,000 per month invested at 8% for 10 years is $1.4 million! Not a bad supplement for retirement income if you ask me. Try your own calculations at Bankrate.com.
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