These might catch you by surprise — in a good way.
Many seniors get a large chunk of their retirement income from Social Security. And for some, those benefits constitute all of their retirement income.
But living on Social Security alone isn’t a great plan. Those benefits, for one thing, will only replace about 40% of your pre-retirement wages if you’re an average earner, and most seniors need about twice that much income to maintain a decent lifestyle.
Then there’s the fact that Social Security has long done a poor job of helping seniors keep up with inflation. That shortcoming has been especially evident this year given the way inflation levels have soared.
If you’re worried about having enough money to get by as a senior, then here’s some good news. If you’re willing to think outside the box, you can supplement your Social Security benefits nicely and set yourself up for the comfortable lifestyle you deserve. Here are just a few viable sources of retirement income worth looking into.
1. Your home
It’s easy to look at your home as an expense, not an asset. But actually, your home could serve as a cash source if you’re willing to let it be.
For one thing, if you have a larger home with a separate living space, like a finished basement, you can find a long-term tenant and use the rent you collect as a means of supplemental retirement income. And if you don’t like the idea of having someone living under your roof all the time, consider renting out your home on a short-term basis during periods when you’ll be away.
But it’s not just space inside your home you can rent out. Have an extra spot in your driveway in an area where parking is difficult? You might manage to command a decent chunk of money each month by renting it out.
2. Your favorite hobby
Maybe you’ve always dreamed of being an artist and selling paintings for a living. During retirement, you can.
It may not have been feasible to quit your day job when you were younger to sit home and paint for hours on end. But now that you’re retired and have the time, why not indulge in your favorite hobby and then market your wares so they serve as a source of added income?
And to be clear, there are numerous hobbies that can be monetized, from crafting to woodworking to baking. And that really gives you the best of both worlds — the chance to do the things you love and take home some cash at the same time.
3. The right investments
Another great way to set yourself up with more retirement income is to choose the right investments. Stocks that pay dividends, for example, are a great option in that regard, as are municipal bonds.
In fact, one major benefit of municipal bonds is that their interest payments won’t increase your federal tax liability. And if you buy municipal bonds issued by your state of residence, you can avoid state and local taxes on that interest income as well.
Set yourself up for a stress-free retirement
Retiring on Social Security alone, or with minimal outside income, could mean having to pinch pennies at a time in life when you deserve better. Rather than resign yourself to that fate, think about the different ways you can supplement those benefits and enjoy more financial flexibility later in life.
