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But what if you can't save 10% out of every paycheck or you like to retire early? What the "experts" won't tell you is that there are some unconventional ways to fund your retirement that might actually work better for you than saving that 10%. Here are eight of them.
1. Buy rental properties
Buying rental properties can be a great way to fund your retirement for two reasons. First, homes almost always appreciate in value over the years. The house you buy today for $150,000 could easily be worth $200,000 or more by the time you're ready to retire. And, of course, all the time that it's appreciating in value it's also generating rental income. However, this does come with some risk. The economy shrinks and expands and so do property values. In addition, rental properties can sit vacant so that they’re costing you money instead of generating income and, of course, houses always need maintenance.
2. Sell stuff on Amazon or eBay
There's really good money to be made by selling stuff you no longer need or by haunting estate sales for things you could sell on eBay or Amazon . It's not uncommon to find things at an estate or garage sale for a couple of dollars that would sell for $25 or more on Amazon or eBay. The trick here is to specialize so that you'll know what things are worth. For example, you could decide to specialize in antique china, model cars or trains, vintage clothes, old radios and so forth.
If the idea of selling stuff on eBay appeals to you, here's a short video explaining the 11 things you need to do before you start selling on eBay.
3. Rent out part of your home
If you can't afford to buy a rental property you might be able to make money off of your own property. If you have a bedroom and bathroom you're not using or if you could put a small kitchen in your basement you could rent out the space and make extra money. In fact, this could have a huge impact on funding your retirement. You say you don't like the idea of sharing your home with someone on it permanent basis? Then run out that space on a temporary basis through websites such as HomeAway and Airb&b
4. Make money off your home's exterior
The money you could make using your home isn't limited to just renting out part of it. There are cases where you might be able to rent out the side of your house is a billboard. Or you might do as one home owner has done and that is rent your shed or garage to people that need seasonal storage of motorcycles, boats and other similar items. GaragePointer and Roost make it easy to connect with people who are seeking storage space. Of course, before you allow someone to paint an ad on the side of your house or park a car in your garage, you should check with your municipality and insurance company to make sure this would be okay.
5. Get a reverse mortgage to fund your retirement
If you are age 62 or older you could take out a reverse mortgage and get regular payments based on the equity in your home. However, be aware that when you pass away or move out the loan balance will then become due. In this case, it’s most likely that the home will have to be sold to pay off the loan. You should probably have a conversation upfront with family members before taking out a reverse mortgage as this will avoid unpleasant surprises later.
6. Monetize your hobby
Whether it's woodworking, cooking, gardening or something entirely different, you may have a skill you could turn into a moneymaker. That skill you take for granted may be very challenging for other people. If you spread the word to friends and family members, you may find people who are willing to pay handsomely for your skills. As an example of this, one person makes really cool handmade cards. She then sells them to bring in extra income. However, this does come with drawbacks. The problem is that the time you spend selling your skills takes away from time you could be spending with your kids or grandkids.
7. Join the gig economy
Thanks to today's gig economy it's easy to make extra money to fund your retirement without having to make a full-time commitment. Instead of slogging through another job or opening a business, you just participate – and without having to own or manage anything. For example, the ride-sharing company, Uber, will pay you for providing rides. It and Lyft are two of the most popular examples of the gig economy. However, there are other ways to participate in the gig economy depending on your skills. There are now literally hundreds of businesses looking for people who can work remotely as content writers, graphic artists, customer service representatives, web builders, social posters and so forth.
8. Downsize to a less expensive home
Once the kids are out of the house and gone you probably have space you're not using. If this is the case, then downsizing to a less expensive home can be a great way to add money to your retirement nest egg. If you have a sizable amount of equity in your current home and downsize to a smaller one you might even be able to pay cash for that smaller home and live mortgage free. If you don't have enough equity to pay cash for a smaller house, you'd at least have smaller payments. Plus, you'd save on property taxes, utilities and maintenance.