Retirement is a time for rest and relaxation, and to reflect on your long life of hard work raising your family and growing your career. The last thing you want is to spend your golden years wondering how you’re going to make ends meet. After all, it was found that people believe they need about $1.7 million saved up to retire comfortably, according to a recent study from Schwab Retirement Plan Services.
Saving up well over a million dollars isn’t always easy, however, especially if you have a large family to feed and send off to college, serious medical bills, and other hefty expenses. This doesn’t mean you’re out of luck, though. There are plenty of ways you can establish a supplemental income in retirement without taking the joy out of your sunset years.
Take a look below at four different ways you can establish a supplemental income in retirement.
1. Sell Your Home
With the kids out of the house and more rooms than you’d like to clean, retirement is a good time to downsize to a smaller home. If you’re a homeowner and paid off your mortgage, your house it a pretty significant asset. Let’s say, for example, your home is worth €400,000 and you move to a new, smaller home that costs €250,000. You’ll have €150,000 leftover that can be used to pay bills, invest in the stock market, or for an exciting travel adventure.
While moving isn’t that simple, and there are other expenses to consider, selling your home and downsizing may be a smart option if you need some financial relief. Plus, if you’re downsizing, your home won’t be able to fit all the furniture you currently have. This is a great time to make some extra cash by selling your unwanted belongings.
2. Get a Reverse Mortgage
After spending your entire life in the house you’ve turned into a home, it can be difficult to part ways. If you’re not ready to put your home on the market, you can consider getting a reverse mortgage. Whereas a standard mortgage is a loan you take out from a bank or lender to pay for your home over time, a reverse mortgage from a bank will pay you a set amount every month. This amount depends on the value of your home, along with your age and life expectancy.
If you’re looking for help for seniors with low income, a reverse mortgage may be the way to go. You’ll receive monthly payments that can be put towards food, bills, travel, and other expenses. It’s important to understand the drawbacks of a reverse mortgage, as well. Reverse mortgages are typically a last-resort for seniors because, over time, the bank will slowly gain more ownership over your house. And while the bank is buying your house, you’re still required to maintain it and pay property taxes.
3. Buy Rental Property
Another great supplement income option is purchasing a rental property and becoming a landlord. If you have the means to purchase a property in a highly-sought area or buy a cheap home to flip and rent, you’ll earn passive income without much effort once tenants have moved in. If you land long-term tenants, you’ll be able to collect their monthly rent payments and make a fairly substantial income.
If you’re not ready to become a full-time landlord, or if you don’t want to buy a rental property, you can consider renting out your own home seasonally or temporarily. Whether you have a finished basement or a spare room you don’t mind opening to guests, you can list it on sites like Airbnb or Vrbo. You can set the dates when you don’t want guests, giving you great autonomy when it comes to establishing a supplemental income.
4. Get a Part-Time Job
Many retirees think retirement is a time to stop working. While some never want to step in an office again, others may enjoy working a low-stress part-time job. An added benefit to picking up a few hours every week is more cash in your pocket.
Rather than spending your days inside watching TV, look for a local job that appeals to your interests. Maybe you’ve always loved gardening and planting flowers. Apply to work at a nearby nursery. Or perhaps you love the calm aesthetic of a small-town coffee shop. See if the owners need a barista a few days a week.
If you don’t want to work for a boss again, you can also become your own boss and start a business or sell something. If you’re a craftsman, try selling homemade furniture and other pieces at local farmers’ markets or craft fairs. Or, if you love creating your own jewelry, you can create your own online shop and sell to customers across the globe.
5. Offer your services on Neighbor
Known by many as the “Airbnb of storage”, Neighbor allows anyone with extra storage space to list the availability of their garage, parking spot, warehouse, shed, or empty closet as available for storage. This way, people can generate a passive income by just storing their neighbors’ stuff.
It’s easy, safe, and free.
Saving up for retirement can be challenging, and when it’s time to throw in the towel and collect your pension or Social Security benefits, you may need additional income to live comfortably. From downsizing to getting a part-time job, there are plenty of opportunities for you to establish supplemental income in retirement.