Many Americans reach retirement with far too little money saved. That can be a big problem. Social Security alone can't support you. So if you don't have a hefty nest egg, you might need to look for alternative income sources.
Here are four out-of-the-box ideas that could provide some unexpected income during your later years.
If you have a professional skill developed over your career, people might pay you for your expertise. Your current employer could be willing to keep you on as a consultant due to your institutional memory, or you may be able to market yourself to other businesses within your industry.
Consulting work often comes with flexible hours, and the pay can be very good if you have specialized knowledge. Just be aware that if you've claimed Social Security benefits already and you haven't hit full retirement age, earning too much from work could reduce your checks.
2. Earnings from hobbies
You'll hopefully have lots more time to indulge your hobbies as a retiree — and perhaps you could even turn some of them into extra cash.
Enjoy walking dogs? Market yourself as a neighborhood pet sitter to people who work. Like to knit? Think about selling your wares on Etsy.
There are all kinds of ways you could turn your creative work or interests into a part-time job that provides some much-needed extra income as a retiree.
3. Renting out your home
Have a nice house in a desirable area? It could be a great income source.
If you plan to travel, you could sublet your space while you're away. This could be an especially profitable approach if you have a home in a tourist area and you can go elsewhere during the local prime vacationing time.
If your area allows it, you could potentially also create a converted garage apartment to rent out or add a granny flat in the backyard to bring in some extra cash. Just be sure you understand the local rules as well as the tax implications of renting out your space.
4. Profits from a home sale
Many people have a lot of money tied up in their homes. If you've paid down your mortgage over the years and have a lot of equity, you might consider selling to generate some much-needed retirement income.
You could list your home to take advantage of current record-high prices and explore downsizing to a cheaper place or even moving to an area with a lower cost of living. Pocket the proceeds from the sale of your home and, after buying a modest new house at a lower price point, invest the leftover money to produce monthly income. If you're in an area where home prices are very high, this could net you tens of thousands of dollars in extra income in retirement.
The key is to get creative when you've hit retirement without a lot of money in the bank. Exploring options for working, making money from your passion, or turning your home into a source of cash could make all the difference when it comes to your financial future.
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