Employed or self-employed, the veritable and desirable conclusion to every long an illustrious career are the leisurely retirement years. Most of you nearing your 50s must be looking forward to retiring and leading an easy life, away from the rat race and the hectic pace of a working man’s life. More than half of you have already thought of making provisions for a comfortable retirement in terms of saving money by being self-sufficient and leading a frugal life. As most of you have figured, saving money should be the easiest way to live your retired life prosperously.

There is another alternative though. It is somewhat more complicated than your regular frugal living but all in all, it is a time tested method with very little negative side effects. Living your retirement years using capital is one of the simplest ways for seniors to achieve financial security. Investment is the core idea behind using accumulated capital to gain financial independence. The trick is to set up a steady trickling flow of income which is sufficiently large enough to cover your expenses and a little more.

Although the method seems to be almost foolproof provided that there are well researched and sound decisions behind these investments, there are some disadvantages. The major hurdle most soon-to-be-retired people face is that it takes a significantly large amount of capital to facilitate and set up an adequate income stream.

Moreover, inflation and low interest rates are also making it harder to spin your investments and grow them progressively. Most financial planning advisers no longer recommend that you accumulate capital as you near your retirement age. Rather, they recommend that you spend down your capital at a pace which matches your estimated lifespan. The expenditures should be soft enough to reduce your capital gradually.

Taxes also form a major problem for people aiming to accumulate capital. The best idea would be to invest and contribute towards funds which are dynamic and lets you draw tax free dollars post retirement to meet qualified expenses. Working a few extra years and claiming Social Security retirement benefits a few years later would significantly boost the value of your income stream. Plus, working extra years also enables you to add contribute extra dollars towards your 401(k) plan. In all, you are actually building up your capital base as you go along. The earlier you start working, the more your capital base will be.

Accumulating money to generate an income stream doesn’t always mean that you have to stash away a portion of your pay check into a savings account. There are ways of ensuring that your money grows as you move towards your retirement age. Roth IRAs are an increasingly popular choice for seniors looking to achieve financial stability while making sure that their money grows at a somewhat faster pace.

Living through accumulating capital can thus be achieved in a variety of ways including investing in federal funds and bonds and maybe even working for a longer while so that you can further contribute to building up your nest eggs. Financial stability in your retirement years can be achieved through sound investment decisions.