“How can I improve my retirement income?” – I wailed to my financial advisor, once I'd received an estimate of my retirement income. The news wasn't good…
While I wouldn't be completely poverty stricken, relying on the UK state pension isn't the way to live the dream lifestyle that I'd seen my friends, who retired before me, enjoying.
From discreet – and not so discreet enquiries – I found that they had been been doing their retirement planning for years. Since their earliest days working, they'd been quietly saving a portion of their income into a pension pot that grew over the years and was no ready to keep them in a comfortable lifestyle for years to come.
I looked at my derisory pension provisions and it wasn't a pretty sight.
Planning Retirement Income
My accountant (Mike) didn't have a lot of sympathy, and to be honest, I couldn't blame him.
My husband and I were self-employed, and I remember how, not long after we'd appointed him, Mike sat us down in the office one day and told us it was time to start saving for retirement.
Well! He might as well have told us to start planning for a trip to the moon, for all the intentions we had of retiring.
We'd just started our brand new technology business, everything was exciting and new …. err… and expensive. With office rentals, staff to hire, computers to buy, adverts to place – well, somehow, there was never enough money left at the end of the month to save for something as far off as retirement.
- We were enjoying the business too much – we could never imagine wanting to retire
- The business was just taking off – by the time we reached retirement age, we'd be RICH – of course 🙂
What Really Happened…
The business did OK, but there were just two of us, plus three staff, so we were very quickly over-taken by larger organisations with glossy offices who just threw money at their business and left us standing in their dust. Their product (a very early accounting software package) might have lacked some of the technical perfection of ours, but truth is, it was more glossily presented, and clients go for the gloss every time.
So – we didn't get rich.
Nevertheless, the business brought in a comfortable living, and with a batch of loyal customers we were fine day to day.
But at the back of my mind was our lack of retirement planning, and our accountant's warning, but my husband wasn't ready to trust our hard earned money to some financial advisor. He still felt we could make better use of it in the business.
Finally he relented and we started with a retirement investment, and – it has to be said – we chose a very well-respected plan. One of the darlings of the financial service industries at the time. I was very risk-averse, and my husband wasn't even keen on the thought of any kind of retirement planning. We still thought we were invincible!
Life Is What Happens….
…when you're busy making other plans.
Disaster number 1 – the ‘safe pension scheme' went bust, taking with it all of our savings. We received some government compensation a few years down the line, but we'd lost too much to recover from the setback – and blow to our trust in the financial services industry.
Disaster number 2 – my husband left me and didn't want to carry on in our business together. So he very generously donated the whole business to me, so that I had an income – but because he'd been the ‘sales' master-mind, I couldn't expect any growth.
Time To Calculate My Retirement Income Again
While there might have been a reasonable retirement income for us if my husband had continue making sales in the business, while I did the ‘customer support', once he'd unexpectedly gone, things took a different turn.
We had taken out a little pension again, but checking on how much that would pay out – especially now there was just ‘me' – it soon became very obvious that I needed to do some serious retirement income planning fairly quickly.
The amount I could afford to save at such a late stage in my earning life, was too little too late.
So I started looking for ways to earn a part-time income, while still carrying on the software business that was bringing in a decent enough income for me day to day.
Making Money Selling A Product
In the years I was looking to earn extra income, there were many reputable businesses selling make-up, perfume and household products. One of my friends built a massive team in a perfume and make-up company and practically begged me to get involved with it – but I just couldn't devote the time during the day.
Also, with some of the other product based companies I had heard of people ending up buying too much stock so that they could meet monthly sales targets. I couldn't afford to go down that route.
In 2020, product based sales are very different – and any reputable company will have their own website and ship products for distributors from head-office. So, this is now a much less labour-intensive option than it was at the time I was involved with product sales.
Nevertheless, I know that some product distributors face different challenges and I'll write about these another time.
So I took a different way to increase my retirement income.
How To Make Money Online
I chose ‘online' because I needed to work from home, so that I would be on-tap for the day-to-day support of my paying clients.
So with my technology background, an online business looked my best bet, and I ventured into the ‘Make Money Online' market place.
Digital Information Products were all the rage, for very valid reasons:
- No need to hold stock
- Easy to update
- Unlimited supply – just produce another copy when needed
- No postage costs – email it
It soon became obvious that there were two main ways of making money with digital online products:
- Produce your own product
- Affiliate marketing (where you market a product someone else has produced and share the profits with them.
There are pros and cons to both approaches, and it's important to choose the correct path for your own circumstances
The Other Unexpected Change
What I had never quite expected, all those years ago, was that there would come a time when I would WANT to retire.
As I see my friends retiring on generous pensions and enjoying holidays and days off ‘just chilling', my day after day slog at my computer software business has become less appealing. My grand-children are growing up before my eyes, and too far away. My parents aged before my eyes – also too far away. My software business still needs me ‘not too far from emails and phone', in case of disasters…. see below.
Heck – I am aging too, and a slower pace of life seems more attractive than it ever had before.
With my sons self-sufficient (more or less LOL), it was time for ME.
Another Shot Across The Bow
My largest software client has always been aware that there's ‘just Joy' running the show, but because I did a good job (though I say it myself) they let the status quo continue.
They grew in leaps and bounds and from the small 4-man band I first worked with, they have grown to be a large company – and have eventually been taken over by an even larger company.
The parent company is now looking in horror at their new acquisition being totally dependent on a one-person software developer, past retirement age!
Yep – I'm for the chop eventually. Not yet, because it's a computer system that's been developed over almost 40 years, so it can't be replaced overnight…. but sometime.
When that strand of income goes….
How Can I Improve My Retirement Income?
… becomes a more urgent question than ever before.
Within this blog I will share some of the insights I've gathered, and if you're at the stage of wondering how to make extra retirement income, I hope that some of my experiences will save you time, money and stress.