As you’ll probably realize soon if you haven’t already, a dollar doesn’t go as far as it used to. That could make retirement a tricky time for some underfunded investors, and Social Security checks probably aren’t (or won’t be) big enough to be a game changer either. It’s not inconceivable that you’ll have to rethink your retirement plans sooner or later if you want to pay all your bills and have a little fun later in life.
To that end, here’s a rundown of five ways to generate money that you can live off of during your golden years, from the most obvious to the least obvious. The last two are particularly unusual, but still worth considering.
Painfully Obvious: Dividends
You may have spent most of your life investing for growth, not seeking income – money – while you did. Your paycheck likely covered your recurring expenses and may even have served as seed money for your retirement reserve.
However, living off the profits from the capital appreciation of growth stocks is a notoriously bad idea. You may need to free up cash by selling stocks at the worst possible time, exiting a losing stock before it has had a chance to recover. For perspective, a bunch of growth portfolios are now worth 20% less than they were just a few months ago.
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The solution to the conundrum is obvious: less growth, more dividends. Even when their prices are upset, a good dividend stocks payment is actually quite reliable.
For perspective, the average S&P500 stocks that pay a meaningful dividend currently pay around 2% of their value.
No wonder: Work
This is not what most current and future retirees expected. The fact is, however, that many of us may return to work later in life if we haven’t already. The Rand Corporation think tank estimates that about 40% of employees in the United States age 65 or older have actually retired at some point, but are re-entering the workforce. This represents approximately 10 million workers, or nearly one fifth of this population.
There’s an important rule about whether you’re that age but already collecting Social Security checks. In other words, if you make enough money at work, Social Security will reduce your monthly benefit. For 2022, every $2 above annual income of $19,560 reduces your monthly check by $1. It might be worth it, especially since you can get some of it back Social security benefits reduced by work.
Enough Meaning: Rental Property
Of course, being a landlord requires you to own real estate that you don’t need to live in yourself. If you do not have a second home to rent, go to the next one. retirement idea of income.
If you have a second home or half a duplex, now is the time to monetize it. Rental rates are currently very high due to a housing shortage that is not expected to ease any time soon. Market research firm RSM suggests that the United States needs about 3.5 million more homes than it currently has to achieve market stability. In addition, the country will need to build 1.7 million new homes per year until 2030 to fully keep up with the growth in demand. That’s an incredibly high order, boding well for anyone who has houses to rent in the meantime.
Crazy Enough to Work: Flipping Stuff
If you’re unfamiliar, “flipping” is a slang term referring to the act of buying something second-hand with the aim of reselling it quickly for a higher price – you get to keep the difference. And you can return anything. Furniture, toys, consumer electronics, and antiques are just a few of the markets where buyers and sellers value convenience more than money.
It sounds crazy at first, but many people not only make money doing it, but have fun while they do it. Reported income ranges from a few hundred to a few thousand dollars per month.
Flipping requires several things. First, it requires a keen awareness of what something is worth. If you don’t know anything about tools, buying and selling power drills won’t be your thing; stick with the products you know.
Second, flipping requires a way to buy the goods and a way to resell them. Garage sales and thrift stores are often go-to sources of inventory, while online marketplaces are usually the best way to sell these items for the best price. Sometimes just listing and being ready to ship something is worth a fortune.
That being said, start small and learn the nuances of this hustle before aiming for bigger profits.
Yes, it’s actually one thing: renting your car
Finally, if you’re willing to let someone else drive it, there are people who would rather rent your car than rent one from a conventional car rental location. Personal car rental service HyreCar reports that you can earn up to $9,000 a year, assuming you sign up with one of the many apps that connect potential drivers with car owners who don’t have always need access to their automobile.
The idea is not without obvious risks and worries. First, your insurance company may or may not like the idea of covering a vehicle regularly driven by various people for business reasons, even though those other drivers are supposed to be insured. So, be sure to discuss the matter with a qualified insurance agent first. It also causes wear and tear on your automobile that otherwise would not reduce its resale value. Think carefully before embarking on this adventure.
If you are comfortable with the terms offered by a honorable peer-to-peer car rental platform however, there is money to be made with the odd business model.
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