Most of us are looking forward to retirement, though it is also likely that we are at least a little worried about our retirement income. We can probably count on some Social Security, but it was never designed to replace all of our income.
So it is up to us to make sure we have enough income flowing to support ourselves in retirement. I have previously written about sources of retirement income, such as fixed annuities, health savings accounts (HSAs), reverse mortgages, and life insurance policies. Here’s a look at five additional sources of income to consider for yourself.
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Now. 1: Refinance your mortgage
Let’s start with an easy source of unexpected income – refinance your mortgage. This will not work for everyone, but if you are mortgaging a mortgage with an interest rate that is about a percentage point higher than the prevailing rates and you intend to stay in your home for a few years or longer (at least long enough to offset your savings the closing costs), may be worth financing again.
If you refinance a monthly payment of $ 2,000 into, say, a $ 1,600, you have $ 400 more in your pocket each month, which can be quite handy when retiring. However, keep in mind that refinancing means you start ticking the clock again, with 30 or maybe 15 fresh years of repayment for you. You can shorten this period by, of course, paying more each month, and it is not a bad idea to strive to introduce pension-free mortgages, if possible, either.
Nr. 2: Selling things online
Many retirees and early retirees are thinking about depleting their possessions – perhaps because they are hoping to move to a smaller home, or perhaps simply because they want to own fewer things and realize that they do not have many of the things they have collected. If so, you may be able to generate an income stream in your first few years of retirement by gradually selling items from your garage, basement, basement and / or storage unit.
You might like this via eBay, or through a series of yard sales. Companies that specialize in selling real estate can perhaps help you solve some articles, and if you have potentially valuable collections of something, you can find an appraiser to help you decide how to proceed. You could even donate many items to charity, enjoy a tax deduction for your problems. However, keep in mind that you must have receipts and list the correct market value for used items. You should also specify your deductions if you want this to be a tax deduction, and your total deductions should be your (recently increased) standard deduction more than this is worth it.
Nr. 3: Payment of debt
Here’s another way to keep more money in your pocket that you may not have thought of: Pay off any high interest debt you may have borne. It is generally good to aim to return with as little debt as possible, to help keep your expenses low. This is especially important with high interest rate debt, such as that of credit cards.
For example, suppose you owe $ 20,000 and incur an unusual interest rate of 20%. That amounts to about $ 4000 that you replace each year in interest alone! Once that debt is paid off, you save that $ 4000 for yourself instead of handing it over to a credit card company. Getting out of debt is not always easy, but it is to be able to be done – and many people have successfully paid off massive debts.
Nr. 4: Collect credit card rewards
If you are sitting with excessive credit card debt, this income-generating route is not the best for you. But if you keep track of your credit card expenses, you may be able to raise some money for it – or credits on your statements as well as other rewards, perhaps for shopping or traveling. You just have to research your spending habits to see which categories get big chunks of your money and learn more about the best credit cards out there. There are many good cash back credit cards that offer a maximum of 2% or more back on just about anything you buy. If you spend $ 1,000 a month on credit cards, that’s $ 12,000 a year, and you get $ 240 back every year.
You might want to gather even more by being more focused and strategic. For example, if you spend a lot on groceries, you can use a card that gets you 6% back on that spending. If you spend a lot on Amazon.com, you can get 5% back on those purchases with the right card. Some cash-back cards offer revolving categories in which you can earn 5% back so you can save your home improvement purchases for the right month. Those who travel frequently (if the pandemic is behind us) can take advantage of travel-related credit cards to pick up many points and rewards that can be used instead of cash, and keep more cash in your pocket.
Nr. 5: Rent space in your home
Finally think about your home. You might save money by spending less, but you could generate income without moving as well. You can rent space in your home – or your entire home – for short periods, through services like Airbnb or Vrbo. If you can get $ 150 a night and rent your room for 20 nights a year, that’s $ 3000 in extra income! Depending on where you live, you may be able to charge much more.
However you do it, you need to have income at retirement. So be sure to plan how you do that, and aggressively save and invest effectively to set up a financially secure future for yourself.
