Nontraditional Ways of Saving for Retirement
When most Americans talk about saving for retirement, the discussion usually revolves around traditional retirement funds such as 401(k)s and IRAs. While this is definitely a great place to start researching and strategizing, the reality is that...
When most Americans talk about saving for retirement, the discussion usually revolves around traditional retirement funds such as 401(k)s and IRAs. While this is definitely a great place to start researching and strategizing, the reality is that there are plenty of non-traditional ways of saving for retirement as well. These creative sources of incomes can make all of the difference when preparing for retirement and increasing the size of your nest egg—here are 5 of these top strategies.
1. Investing in Real Estate
It’s possible to invest in real estate through a traditional retirement fund, but you should also consider investing in real estate outright. Particularly with the proliferation of individuals renting out rooms and apartments on user-friendly services like Airbnb—which alone boasts over 640,000 hosts in more than 57,000 cities—there are plenty of opportunities to earn money with real estate. Owning a second home or renting out part of your current home can be a hassle-free method of earning residual income. Plus, relative to investing in the stock market, real estate investments tend to be somewhat less risky.
Related: 5 retirement money wasters seniors should avoid
2. Government Bonds
While you’re not going to earn the most impressive returns on your government bonds, you will have the peace of mind in knowing that you’re earning a consistent return on your investment each year. As opposed to the stock market which can fluctuate unpredictably at times, your bonds will follow a much more foreseeable route. Moreover, you’ll earn a greater return on your investment with bonds than if you would’ve simply stored that money in a savings account.
3. Part-Time Job
Besides for saving or investing a larger percentage of your current income, another effective way of saving for retirement is to earn more money before you retire. If you’re one of the fortunate people with spare time on their hands, then consider working a part-time job on the side and using that income to save for your retirement.
Keep Reading: 7 great part-time jobs for retirees
4. Small Business Income
If you’re an entrepreneurial thinker and looking to save for retirement, why not start a small business that can earn you some extra income on the side? While the perception is that startups are usually founded by recent graduates straight out of college, business surveys have shown that there are many successful entrepreneurs of all ages, even among seniors who are already retired. It’s never too late to start your own small business. Fortunately, even if you’re not an entrepreneur yourself, there are a plethora of ways that you can invest in a small business and use that income to pad your retirement fund.
An annuity is an insurance product where you receive payments based on the initial size of your investment, enabling you to receive a steady “paycheck” even while retired. Unlike your typical tax-deferred retirement savings plan, with annuities, there are no limits to how much you can save each year. This means that you’ll be able to save as much money as you can without paying taxes until you cash out of your annuity.
Keep Reading: Transitioning to retirement: A look at what you need to know