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Explore Alternate Sources of Income If You Are Retiring in 2023

By Lyle Solomon February 20, 2023 Managing Money

Retirement is the time when you can finally relax and enjoy life without the daily grind of a nine-to-five job. But what if you’re not ready to retire? What if you still want to bring in some extra income?

Retiring in 2023 can present some unique challenges. Many people are seeking alternative sources of income to supplement their retirement savings. Fortunately, there are numerous options available to generate additional income.

In this article, we’ll explore the different types of income and the benefits of alternate sources of income. We’ll also provide some ideas for generating additional income to supplement your retirement income.

Why Consider Alternate Sources of Income?

When planning to retire in 2023, having additional sources of income can help you build a more secure financial future. Even if you’re retiring with a pension or Social Security, having extra income can help you bridge the gap between retirement and your desired lifestyle.

Other than wanting to maintain your lifestyle, there are other benefits to considering alternate sources of income. A significant advantage of having an additional income is that it can help you pay down debt, such as a mortgage or college loan. It can also help you save for future goals, such as a vacation or a new car.

In addition to the financial benefits, having alternate sources of income can also provide mental stimulation. Many retirees find that having an additional income stream keeps them engaged and interested. It can also help you stay connected to the workforce and sharpen your skills.

Benefits of Exploring Alternate Sources of Income

There are several benefits to exploring alternate sources of income. Having an additional source of income can help you stay financially secure during retirement. It can also provide mental stimulation and help you stay connected to the workforce.

In addition to the financial and mental benefits, having alternate sources of income can also help you reduce your taxes. Depending on your type of income, you can take various tax deductions, benefits, and credits. This can help you lower your tax burden and maximize your retirement income.

Finally, having alternate sources of income can provide you with more flexibility. If you find that you’re not able to work full-time, you may be able to find part-time or freelance work that allows you to work when it’s convenient for you.

The Different Types of Income

There are numerous types of income that you can explore if you’re retiring in 2023. Some of these include investing in stocks, real estate investing, starting a business, selling items online, freelancing, renting out the property, and taking online surveys.

If you’re considering alternate sources of income, many options are available. Here are some of the ideas you can explore to generate additional income.

Investing in Stocks with Dividends

Stocks that pay dividends have long been recognized as a solid choice for creating passive income. Several publicly traded companies regularly distribute dividends to investors, which are a percentage of the company’s earnings. Small dividends per share are typical, but as your investment grows (or the company prospers), so does your income.

You can increase your stake in the company and, potentially, your dividend payouts by reinvesting your dividends. It takes time, effort, and a sizable financial commitment to generate sizable dividend payments. However, if you invest consistently in dividend stocks, you may have a nice nest egg.

When investing in stocks, it’s important to do your research. Doing research on the stocks you want to buy and understanding how the stock market works can help you make better decisions and earn more money. You should also consider the risks involved with investing in stocks and the fees associated with trading.

Real estate Investment Trust (REIT)

What if you don’t want to purchase an entire apartment building? But can you still earn money without owning one? The answer is yes.

You can start real estate investments with as little as $500 through a real estate investment trust (REIT) platform. You can benefit from the platform’s diversification, and the growth of your passive income as your investments increase in value.

The term “REIT” refers to a business that invests in and manages profitable properties. Investment funds are a fantastic way for smaller investors to make large-scale investments that would be out of their price range if they tried to make them individually.

The typical annual return on REIT investments over the past decade was 9.5%. If you have access to seed money, REITs are one of the best long-term investments you can make to generate passive income.

Become a Silent Business Partner

Becoming a silent partner in a business is a great option for passive income that many individuals have never heard of. You invest in the company by purchasing equity in place of giving a loan to the company. As a result, you receive a share of the company’s profits, and your investment is secured by a proportional share of the company’s assets.

Some sites exist specifically for the purpose of connecting people looking for silent partners with companies actively seeking such partnerships. Additionally, spreading your investment across multiple new ventures reduces your risks.

Suppose you’ve considered starting your own business but have ultimately decided you don’t want to put in the time and effort required. In that case, this is one of the best passive income ideas you can implement immediately. You should know that researching the company’s financials and ensuring your rights as an investor are safeguarded is essential for passive income ideas like these.

Starting a Blog

Blogging’s potential for passive income has freed many people from the labor market. WordPress is an excellent platform if you want to start a blog about your travels and share your adventures with the world. You can document all your exciting experiences whenever you travel somewhere new.

There are numerous avenues to financial success. You can sign up for ad programs such as Google Adsense and place them in your site’s sidebar to earn income from the ads. You will earn a commission from an advertising partner such as Google for each click that results from your promotion.

Try Affiliate Marketing

Another option to earn money passively is to join an affiliate program. Affiliate marketing is just one method of making money online; it entails promoting products or websites in exchange for a commission. Earning a commission every time someone clicks on your referral link and purchases the suggested product or service is a fantastic way to generate passive income.

Affiliate marketing attracts web-based business owners for several primary motives:

Simple in Practice

Just take care of the advertising aspects, and you’ll be fine. The company will create products and ship them out to customers.

The Risk Is Low

In most cases, affiliate programs have no initiation fees. You can sell existing products without making any initial financial investment. It will take effort to build up traffic sources that will increase link clicks. Once that’s in place, commissions can become a source of passive income.

It Can Grow

When it comes to marketing, affiliates rarely bring on extra workers. You can build an audience and launch campaigns for new products while your older work continues to generate passive income.

Making money through affiliate marketing can be a satisfying way to expand your company’s revenue potential. Investing a little bit of your time is all that is required. Once the time has been put in, the payoff will be ongoing.

Investing in Rental Properties

A great way to generate passive income is to invest in rental properties. However, a lot of effort is usually necessary.

You should remember that your initial investment could go to waste if you don’t put in the time to study how to turn a profit.

To generate passive income through rental properties, you must consider three factors:

  • How much return do you want from your investments?
  • The total money spent on the property so far.
  • Financial risks associated with property ownership.

When you are planning to rent, you should consider the cost and your profit before deciding the rate. For example, if you want to make $10,000 per year in rental income, but the mortgage payment is $2,000 per month, and other expenses come to $300 per month, you’ll need to charge $3,133 per month in rent.

There are a few things to consider in terms of risk. Owning a property has its perks and risks, but do you think your property would sell? If your property doesn’t sell, it becomes a problem for you.

Another thing to consider is tenants. What if you end up with a tenant who either pays late or causes significant damage to your property? What options do you have if you cannot find tenants for your home? Your passive income could take a severe hit if any of these things happen.

Real Estate Crowdfunding

Crowdfunding platforms offer an alternative for those who want to invest in real estate but also don’t want to deal with the day-to-day responsibilities that come with it. A team of experienced investors chooses the property, and then you can consider if you will invest and how much.

Minimum investment amounts may range from ten dollars to tens of thousands of dollars, and you’ll be required to pay a yearly management fee to the real estate platform.

The advantage of these private real estate deals is that they have already been vetted by experienced investors and may provide a favorable opportunity for you to profit. By looking at their past performance, you can see how much money people have made on these platforms and over what period of time. Moreover, diversifying your holdings to include real estate investments can even out your returns.

Equity and debt are two types of investments that can be made on a platform. Typically, the stock offers high returns for high risk, while debt offers lower profits for reduced risk. Accredited investors are only accepted on some sites, which means you need a certain level of wealth or income to participate.

On many crowdfunding sites, you’re responsible for making your investments. While high rates of return in the past may seem encouraging, they are in no way indicative of future performance. To top it all off, you’ll have to use your best judgment when deciding what to purchase. Because of this, you should carefully consider the benefits and drawbacks of each deal by reading the prospectus for it.

Real estate is also particularly vulnerable to economic downturns because it is typically funded with large amounts of debt financing. You should know how long your money will be locked up in the investment and how soon you can access it in case of an unexpected expense.

Investing in Bond Ladders

The term “bond ladder” refers to a portfolio of bonds with staggered maturities spread out over several years. The staggered maturities enable you to reduce reinvestment risk, which refers to the danger of reinvesting your funds when bonds pay too little interest.

For decades, retirees and those close to retirement have found comfort in a bond ladder’s security and low maintenance. Investors can sit back and collect interest payments for as long as they like and then “extend the ladder” by reinvesting the principal into another series of bonds when the original bond matures. Bonds of one, three, five, and seven years would be an excellent place to start.

With a bond ladder, you won’t have to worry about having to buy a new bond at a time when interest rates are unfavorable, which is one of the most significant risks associated with bond investing.

There are, however, additional dangers involved with bond investing. Corporate bonds are riskier than Treasury bonds because they do not have the federal government’s guarantee in case of default. You can significantly reduce the risk of loss from any bond by owning many bonds, so it’s in your best interest to do so. The value of your bonds could fall if interest rates rise generally.

As a result of these worries, many investors are turning to bond exchange-traded funds (ETFs), which offer a diversified bond fund that can be laddered to reduce the impact of any one bond’s performance on overall returns.

Paying Off Pending Loans

Paying off your debts can be a great way to have an easy retirement, as it gives you more access to money and means you won’t have any extra obligations to make payments for. Bringing debt into retirement can become difficult for you and burden you with additional costs.

With money problems, many turn to taking out payday loans or cash advances to make ends meet but end up getting stuck in a cycle of debt.

Therefore, taking care of pending loans is crucial. Payday loans must be paid as soon as possible so they don’t become a more significant issue later. By clearing out your payday loan debts, you can make more money available to invest in your retirement fund or use that money to pay off other expenses.

Additionally, paying off debts can help improve your credit score and make you more attractive to lenders, opening up more opportunities for you to save for retirement.

Finally, it can reduce the amount of stress you experience around money, making it easier to focus on saving for the future.

Strategies for Maximizing Your Retirement Income

Once you’ve explored the different types of income and ideas to generate additional income, it’s time to develop a plan to maximize your retirement income. Here are some strategies you can use to maximize your retirement income:

  • Understand the tax implications of different types of income.
  • Take advantage of retirement accounts and deductions.
  • Create a budget and stick to it.
  • Make sure your expenses don’t exceed your income.
  • Invest in low-risk investments.
  • Diversify your portfolio.
  • Develop a plan for long-term care.

Bottom Line

When you’re retiring in 2023, exploring alternate sources of income can help you build a more secure financial future. There are numerous types of income available and ideas to generate additional income.

When exploring alternate sources of income, it’s essential to understand the risks involved and the associated costs. You should also consider the tax implications and create a plan to maximize your retirement income.

Retirement doesn’t have to mean giving up your financial security. By exploring alternate sources of income, you can supplement your retirement income and enjoy a secure financial future.

Let’s Have a Conversation:

What is the best alternate source of income you have used? How are you making sure that you have enough passive income during your retirement? Do you have any more examples of alternate sources of income options apart from the ones mentioned above?

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The Author

Lyle Solomon has extensive legal experience as well as in-depth knowledge and experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, in 1998, and currently works for the Oak View Law Group in California as a Principal Attorney.

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