When you think ahead to retirement, you're probably already planning on getting income from Social Security and maybe a pension if your employer offers one. But there may also be some unconventional sources of funds you aren't thinking about -- but perhaps should be.
Since you'll likely need more money than Social Security can provide once you retire, you may want to consider setting yourself up to receive income from these four unexpected sources.
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1. Your home
Your house isn't just a place to live -- it could also help you get some much needed extra money in a number of different ways. If you have a large home with lots of equity in it, selling, downsizing, and pocketing the profits is one option to fatten your bank account. You could also consider a reverse mortgage, although there are pros and cons to that approach.
Renting out a room in your home is another possibility, or even renting out the entire place if you travel at various times of the year and it sits empty while you're away.
2. Income from a job
Retirement doesn't necessarily mean having to give up getting any sort of paycheck. You could consider staying in your field in a part-time capacity, starting your own company, selling crafts on Etsy, or trying out one of many available side gigs, such as driving for a ride-sharing service or walking dogs.
Continuing to bring in money from work can help you stay busy and enable you to rely less on savings and Social Security. If you can work for as long as possible, you'll have more money left over to spend later in retirement when your health or a lack of opportunities may make this approach more difficult.
3. Interest income
If you have money in a high-yield savings account, you can keep your funds safe from loss (as long as the account is FDIC insured), while also earning a little extra cash in the form of interest payments. The rates that savings accounts have been paying over the years have been paltry, but they're going up as the Federal Reserve raises interest rates. So the interest you earn may be a little more substantial in today's current economic climate.
4. Dividends
Finally, dividend income can be a great source of retirement money.
Many publicly traded companies pay out dividends to distribute profits to shareholders. When you receive dividend income, you get money from your investments without having to sell them. The more money you have invested in dividend-paying stocks, the larger the income stream you create.
While it's always possible companies could stop paying dividends or reduce the amount they pay, some stocks called Dividend Aristocrats have a multidecade, consistent track record of reliably distributing funds (and even increasing the amount they send out over time). This means they can serve as a pretty stable income source.
The good news is, you can get money from multiple sources as a retiree -- potentially including these four different options. Take the time to consider what approaches to supporting yourself will work best for you so you can have the comfortable retirement you deserve.
