Yahoo Finance 10 Passive Income Streams That Can Fund Your Retirement Years
When you reach retirement age, you don’t want to be thinking about where your income is coming from; after all, you’ve spent a lifetime working and this is your time to rest and enjoy a more leisurely stage of life.
Proper planning can set you up to generate passive income that might even be able to do more than supplement your income but fund your retirement years.
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Invest in Rental Property
Real estate is almost always a good investment so long as you buy within your means and at a reasonable price and mortgage interest rate. It earns you equity over time and allows you to rent out your property for rental income.
As Rhett Wiseman, a real estate investor and the founder of Wiseman Advising LLC/Section8Coaching.com, previously told GOBankingRates, “The best way to create passive income, without question, is through real estate. It’s the safest and easiest way and has the most opportunity regardless of where you stand financially.”
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Get a Roommate or Housemate
If you don’t have a property you can rent and live elsewhere, consider bringing in additional income through a roommate or housemate.
This will be especially lucrative if you have already paid off your mortgage, so that, other than property taxes and maintenance costs, that money is pretty free and clear. The national median rent for an apartment, as of March, was almost $2,000 per month, you can see the potential for significant income.
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Rent Things Out
Thanks to digital advances and apps, you can rent out just about anything you can imagine to earn hundreds to thousands of dollars each month. You can rent out your car. Your parking spot or driveway. Storage space in your home. A pool or backyard. The options are vast and varied.
If you’re creative and don’t mind hosting others, you could make a decent, ongoing additional income.
Buy a Vending Machine
Who doesn’t love a vending machine, where you can grab a snack and a drink for low prices? If you own any of these, you could make several hundred dollars per machine weekly with little effort.
“Getting into vending machines is a great way to earn passive income over the weekend because they only require restocking every one to two weeks,” said Nathan Brunner, CEO at Salarship, told GOBankingRates previously.
Peer-to-Peer Lending
If you find yourself with a bit of spare change in retirement that you can loan out, you can benefit from interest-earning through peer-to-peer lending.
Whether you do this yourself and find people to loan the money to, or you work with a company that anonymously matches up borrowers and lenders online, it can be a great way to earn passive income.
Of course, you need to ensure the terms are in writing, legal and reputable so you’re not left in the lurch.
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Dividend Paying Stocks
If you’ve got a knack for picking stocks that perform well, consider investing in dividend-paying stocks. These are the kinds where companies pay their investors out some of their earnings throughout the year, which can lead to a nice little nest egg of passive income.
Of course, you do have to know how to pick decent stocks.
Take Out a Reverse Mortgage
If you’ve already paid off your mortgage and need access to income, consider a reverse mortgage.
In essence, the bank will loan money back to you via a home equity line of credit. This also allows you to maintain the title of your home and still live in it.
You also won’t be taxed on the money you receive from the reverse mortgage. There are some downsides to consider, but it’s a wise way to bring in much-needed income without taking out an additional loan.
High-Yield Bonds
If you’re comfortable with risk, high-yield bonds can generate a lot of income quickly and passively.
The trade-off is that these are usually invested in companies without much history or reputation to back up how well they’ll do over time.
These can produce a higher return, averaging around 8% annually, so long as you understand the risks going in.
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Annuities
An annuity is a financial contract between a consumer and an insurance company, Stephen Kates, CFP, the principal financial analyst for Annuity.org, previously told GOBankingRates.
They offer a guaranteed passive income stream in either monthly or lump-sum payments and are designed for long-term use. Buying these earlier in your life is a good idea, but you can invest in them.
Real Estate Investment Trusts
A real estate investment trust (REIT) is an investment company that owns investment properties and includes property types, from apartment buildings to office buildings or shopping malls.
They also hold mortgages or other real estate debt. Anyone invested in a REIT will ideally earn dividend income, depending on how these properties appreciate over time.
Some REITs invest in mortgages, where they loan out money to purchase real estate and make money back in interest. Some REITs require a more sizable investment upfront, so be sure to do your due diligence.
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This article originally appeared on GOBankingRates.com: 10 Passive Income Streams That Can Fund Your Retirement Years
