Have you recently retired or are about to retire and wondering how you’ll earn extra money in your spare time? You might be surprised that thousands of folks like you face the same question. Just because you’re stepping away from your career and the workforce for good doesn’t mean your income-earning days are over.
Here are five excellent ways to earn money while in retirement.
Invest in Financial Instruments and Derivatives
Investing is one of the most effective ways to prepare for retirement. Often, pensioners retire with respectable nest eggs that they can use to ease the financial burdens of the next chapter in their lives. But what if you couldn’t invest in anything other than your 401k and a retirement savings account? Is it too late to start investing?
Fortunately, the answer is a resounding no. It’s never too late to get into stocks and other investment instruments. But I get it — retirement is supposed to be about living comfortably and not working too much. Day trading and capital appreciation-centric investing may not be the best things to do. Besides, technical trading might be too complicated, or you might not have time to study. So here are two simple financial instruments and derivatives that are perfect for retirees.
Let’s start with the classics. Stocks are shares of companies sold on public exchanges. Buying stocks makes you an owner of a very small part of the company you chose. And that makes you entitled to certain rights — including receiving a portion of the company’s earnings. These come as dividends, which are regular or irregular payouts to shareholders that act as a reward for buying the company’s stock. To be clear, when I say irregular, I mean that not every company regularly pays dividends to investors.
To earn extra income from your investments, you’d need to choose a quality company that pays regular dividends. Better yet, buy a stock with regular dividend payments that increase yearly. We have a few of those, classified into several categories for convenience, but two of the most popular are Dividend Aristocrats and Dividend Kings. This blog isn’t intended to give exact investing advice, but to point you in directions you may not have thought about previously.
For examaple Dividend Aristocrats are listed on the S&P 500 and have increased their dividend payments for 25 or more consecutive years. Meanwhile, Dividend Kings are companies that have increased their dividend payouts for 50 or more consecutive years. Companies on one of these lists are known for their reliability and impressive ability to maintain profitability despite economic turmoil. Investing in one or more of these stocks is like getting a yearly salary increase!
Options are financial derivatives based on stocks, indexes, exchange-traded funds (ETFs), and other financial instruments. The basic premise of an option contract is simple: you are either buying or selling the right to buy or sell an asset at a specified price within a specified time. If I were to boil it down, there are only four things to understand in options: buying calls, buying puts, selling calls, and selling puts. But you’d be surprised at how many ways these four simple functions can be applied to generate income! However, you’d need to spend a little time and effort learning the ins and outs of options trading before trying it. It would also be wise to seek professional help in the beginning until you become proficient on your own.
But the covered call strategy is very popular for those retirees committed to trying this income-generating derivative. It’s very easy to do: all you need to do is buy stocks, sell call options on the stock, and the premiums are yours to keep.
Act as a Consultant
If you’ve been working for decades doing something, chances are you’ve developed some proficiency with tasks related to your field. And when you retire, you take that with you. Suppose you’re lucky to have worked on something with widespread application (like being an electrician or a master carpenter). In that case, you might be able to apply those acquired skills to everyday life. But what if you worked on something specialized, like HR management or a legacy programming language? How do you use your decades-long work experience while getting paid for it?
Why, you offer consulting services, of course! Depending on your previous career, you can offer several types of consulting services:
- Management Consulting: Management consultants can help guide companies through initial phases, transitions, or high-impact changes. They also assist with long-term planning and goal setting and can be invaluable in optimizing workflow processes and business structuring.
- Human Resource Consulting: Similar to management consulting but focusing more on human resource management. This type of consulting covers talent acquisition, onboarding, training, development management, and employee engagement and retention.
- ESG/Environmental and Sustainability Consulting: Environmentally conscious business models are getting increasingly popular. ESG (environment, social, and corporate governance) consultants help companies integrate sustainability programs, environment-friendly options, and responsible business practices into their operations while maintaining profitability and shareholder value.
- Dating/Social Interaction Consulting: You didn’t think we’d be all about business here, did you? Dating or social interaction consulting is perfect for retirees who have developed razor-sharp social skills during their professional careers. You can offer clients ways to build confidence, initiate and maintain interesting conversations, improve their dating skills, and guide them to personal development.
- Parenting/Child-raising Consulting: Parenting can be one of the most challenging and rewarding adult experiences, and a few people are willing to pay for expert guidance. After all, you can’t really put a price on raising a child the right way. Retirees with experience and the skills to relay their wisdom can offer parenting tips to those needing a helping hand.
Stream And Create Online Content
In 2011, a gamer named Shirley Curry created a YouTube channel. It took some time, but in 2015, she uploaded her first video where she plays The Elder Scrolls V: Skyrim. The video was an immediate hit, with viewers loving the energy and enthusiasm she brought to her playthrough. Shirley would branch out a bit over the years, uploading videos of her playing games like ARK: Survival, Fallout 4, and Civilization V, but she always returned to her beloved Skyrim, which she’s still playing to this day. She also made a few vlogs, giving her fans updates about her life outside gaming. As of October 2023, her YouTube Channel has over 1,200 videos, 1.28 million subscribers, and over 28 million views.
Oh, yeah, and she’s also 87 years old.
Video game streaming and content creation aren’t exclusive to young people anymore. There are hundreds of YouTube channels run by retirees and octogenarians like Shirley. The good news is that you don’t have to limit yourself to video games, especially if that’s not your style. Feel free to explore your creative side and discuss anything you want. Here’s a quick list of things you might want to try with example channels.
- Beauty and makeup tutorials: Look Fabulous For Older Women by Tricia Cusden
- Cooking and Baking: Pasta Grannies by Vicky Bennison
- Fitness and physical health: Elder Gym by Doug Schrift
Rent Out Extra Rooms or Properties
It’s a fact that your kids will one day grow up and move out of your home to live their own lives. Once filled with the excitement of children running around, your house might feel empty now, except for holidays and special occasions. While there are several ways to alleviate loneliness — getting a pet or two, for instance — one choice can get you the human contact you need and become a source of income: room rental.
It doesn’t have to be a room, although most people prefer that. You can go as small as beds pacing or as big as renting out your entire garage or floor. While you’re at it, you can look at the properties you’ve acquired over the years and see how you can use them. Don’t limit yourself to living spaces when renting out properties for garages, workshops, and parking spaces are all viable options. Prices for property rental vary by location, so be sure to check out local listings to get a good idea of how much to charge.
Profit from Handicrafts
Sometimes, the leisure activities you cultivate throughout your life can become great sources of income for your later years. If you’re good at calligraphy, knitting, pottery, jewelry-making, papercrafts, candle-making, and other handicrafts, you might just be able to find a market demand for your work. You can start as a made-to-order business or visit online marketplaces to sell your work.
You can also generate income by teaching a class or creating manuals or video tutorials on your chosen craft. The only practical limit to this type of business is your time and energy, which you can dole out as and when possible. Remember, you’re retired and don’t need to put your nose to the grindstone. But if you want to… nobody is stopping you.
Don’t limit yourself to these five ways to earn income during retirement. There are many more activities like the ones above, like pet sitting and renting out your car. Be sure to check your options, available resources, and the time and energy you will put into doing your thing. Just don’t forget to take the time to relax because that’s what retirement is all about.
Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning company based in Goodyear, AZ. He has over three decades of experience working with investments and retirement planning, and over the last ten years has turned his focus to self-directed ira accounts and alternative investments. If you need help and guidance with traditional or alternative investments, call him today (866) 639-0066.