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3 Ways to Earn Extra Income in Retirement

Katie Brockman, The Motley Fool

Roughly a third of baby boomers say they plan to continue working past age 70, or perhaps never retire at all, according to a report from the Insured Retirement Institute. Also, of those who have postponed retirement, around one-third say they did so because they don't have enough money saved.

Retirement is becoming more expensive than ever, with the average workers saying they think they'll need around $1.7 million to retire comfortably, a survey from Charles Schwab found. For many people, retirement may seem like a goal that's out of reach financially -- especially considering you may not be able to rely on Social Security to make ends meet.

But if your savings are lacking, there are a few ways to boost your retirement income. Although these jobs require some work up front, they can eventually turn into extra income -- so you can earn cash to supplement your retirement lifestyle.

A wallet full of hundred dollar bills

Image source: Getty Images.

1. Rent out your home

By downsizing in retirement, you can save money in several ways. If you sell your current house and move to a smaller, less expensive home, you can potentially save hundreds of dollars per month on your mortgage or rent.

Another option, though, is to move to a smaller home or apartment, and keep your current home so you can rent it out. Buying a second home is a huge investment, and not everyone can afford the up-front cost. But depending on your home's size, condition, and location, you could potentially earn thousands of dollars per month in rent. You will need to consider the expenses in renting your property, including general maintenance and upkeep as well as the costs of finding tenants. But the investment can provide a steady source of income for years to come.

If you like the idea of renting your home but want to test it on a smaller scale, you can consider renting out one or two rooms in your current house to start. Maybe you have a basement that goes unused, for example, and you can rent that out either on a short-term or long-term basis.

And if you discover the rental property business isn't right for you, you haven't made any significant investments. But if you decide you love it, you can invest on a larger scale -- and make a lot more money.

2. Create and sell an online course

After spending several decades in your career (or perhaps launching careers in several different industries), you've likely become an expert at your craft. So why not sell that knowledge?

There are several web platforms -- such as Udemy, Thinkific, and Teachable, to name a few -- that allow you to build courses and sell them to an online audience. Typically, these courses are in video format, and users will pay per course. While it does involve a bit of work up front to create your course and market it to your target consumers, once you upload it and start selling, it's easy income.

Selling these types of courses can also be a fun and creative way to share your passions. Whether you want to teach people how to be a good leader or manager, the basics of graphic design, or how to train their dog, the possibilities are endless. Even if you aren't earning a six-figure salary from your courses, they can still be an exciting retirement hobby you can do from the comfort of your couch while also earning some extra cash.

3. Launch a side business

If you've always dreamed of becoming an entrepreneur but weren't ready to give up your day job to launch your business, retirement may be the perfect opportunity to finally live out your dream.

When starting a side business, it's up to you how big you want to go. In retirement, opening a brick-and-mortar store that will likely require working 40-plus hours per week may not be ideal. But maybe selling your homemade crafts on Etsy would be an easier way to make some extra cash.

Don't be afraid to get creative with business ideas. Start with your passions, then build on them. If you've always enjoyed working with your hands, for example, maybe you could buy old items from a thrift shop, fix them up, and resell them. Or if you love to cook, perhaps you could sell your recipes online or start a cooking blog.

Also, no matter what type of business you choose to launch, if your concept skyrockets to success, you can always hire someone else to help run the business -- or at least help with the more mundane aspects, like packing and shipping. No business will be entirely hands-off, especially in the beginning as you're getting it off the ground. But as the business grows, you might find that you can outsource some of the work while continuing to do what you love.

Creating new sources of income in retirement can be beneficial for many reasons. Not only does it provide some extra cash when money may be tight, but it can also be a fun hobby to keep you busy after you leave your job. You may even choose to establish several sources of side income in retirement, which can let you explore your passions while improving your financial security at the same time.

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