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6 Smart Ideas To Retire Rich
Updated On September 14, 2022
Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.
Investing is one of the best strategies to build and preserve wealth and save for retirement.
If you are planning to retire in the next few years, then it’s never too early to start planning to retire rich. Here are 6 smart ideas to retire rich.
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June 2023
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1. Move to a state with no state income tax
If you’re thinking of downsizing, selling your home and moving, then you should consider relocating to a state with no state income tax.
Currently, there are nine states with no state income tax: Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.
New Hampshire and Tennessee, however, tax dividends and income from investments.
Be sure to check for other taxes such as property taxes and sales tax, for example, that might be levied in lieu of state income taxes.
2. Move to a state with no tax on Social Security or pension income
According to CCH, the Tax Foundation and Vertex Research, there are 12 states that do not tax Social Security or pension income: Alabama, Alaska, Florida, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington and Wyoming.
3. Sell your stuff on OfferUp
If you are downsizing, moving or want to monetize unused items in your home, consider selling your belongings for cash on OfferUp, a mobile marketplace to buy and sell merchandise. With over 33 million downloads and more than $14 billion in transactions, OfferUp is now the largest mobile marketplace in the U.S. You can buy a sell everything from furniture and electronics to cars and boats for free through the OfferUp mobile app.
4. Work remotely to generate extra income
If you would like to generate extra income, but do not want the burden of full-time employment, then consider working remotely or part-time. FlexJobs is a professional job service that helps you find telecommuting jobs as well as part-time and freelance assignments. Currently, FlexJobs features over 32,000 jobs at nearly 4,800 companies.
5. Refinance Parent PLUS Loans
If you borrowed a Parent PLUS loan for your child to attend college, and your child has now graduated, your retirement is an optimal time to refinance Parent PLUS loans.
A direct Parent Loan from the federal government for undergraduate students, also known as a Parent PLUS loan, has higher interest rates than student loans as well as fees. There are two ways to refinance Parent PLUS loans:
- As the parent borrower, you can refinance the Parent PLUS loan in your name; or
- Your child can refinance the Parent PLUS loan in his or her name
If your child refinances Parent PLUS loans into a student loan, he or she will need to have sufficient income and credit history to be approved for the student loan refinancing and also will be financially responsible for the student loan. Since the federal government does not refinance Parent Loans or student loans, you or your child would refinance with a private lender.
If your child refinances the Parent PLUS loan into his or her name, the parent borrower could act as a co-signer to help him or her receive a lower interest rate. A co-signer, however, would be financially responsible for the refinanced student loan.
6. Remove yourself as a co-signer of a student loan
If you are a co-signer of your child’s student loan and no longer want to be financially responsible for your child’s student loan, your child can refinance their student loan with a private lender. In this case, you as the parent co-signer would no longer be financially responsible for your child’s student loan (and your child would have full responsibility).
If your child already refinanced his or her student loan with a private lender, and you are a co-signer to your child’s student loan, you should check with the lender regarding a co-signer release option (which would absolve you the parent borrower of financial responsibility).
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