What Are Ways to Make Money When Retired?

Retirement marks a new chapter, often accompanied by a desire to remain engaged and financially secure. While Social Security, pensions, and personal savings form the bedrock of many retirement plans, supplementing this income can provide greater flexibility, fund new interests, or offer a sense of purpose. Many retirees seek additional income to manage costs, pursue passions, or maintain an active lifestyle. Exploring income-generating strategies can empower individuals to shape a fulfilling and financially resilient retirement.

Part-Time Employment and Freelancing

Part-time employment or freelancing allows retirees to leverage professional skills and experience for direct compensation. Many traditional roles offer flexible hours, accommodating the retirement lifestyle. Opportunities exist in customer service, retail, and administrative support, including seasonal work.

Remote work provides additional flexibility, enabling individuals to work from home. Virtual assistant roles, online tutoring, and data entry are common remote options, often requiring only a computer and a reliable internet connection. Some companies actively recruit retirees for remote positions, recognizing their valuable experience and reliability, such as call center or healthcare coaching roles.

Freelancing and consulting allow retirees to apply expertise on a project basis. Professionals in accounting, legal services, writing, editing, graphic design, or IT support can offer services to businesses and individuals. Platforms like Upwork and Fiverr connect freelancers with clients, providing a marketplace for skills. This work offers autonomy over schedule and workload.

The gig economy offers a flexible path to earning income by providing services. This includes ride-sharing or food delivery, offering flexible hours and independent work. Other gig opportunities include pet sitting, dog walking, or home repair services. These activities involve a direct exchange of time or service for payment, often managed through apps.

Income from freelancing, remote work, or gig economy activities is subject to self-employment tax, covering Social Security and Medicare. For 2024, this tax rate is 15.3% on net earnings up to $168,600, with a 2.9% Medicare tax on earnings above that threshold. Individuals are responsible for paying estimated taxes quarterly if they expect to owe at least $1,000 in tax. The IRS provides Form 1040-ES for calculating and paying estimated taxes, with due dates typically in April, June, September, and January. Business expenses, such as home office costs, supplies, or travel, can be deducted to reduce taxable income.

Monetizing Skills and Hobbies

Retirees can transform interests and hobbies into income sources, often informally. Creative arts and crafts offer a way to monetize passions, such as selling handmade items like knitted goods, pottery, paintings, or jewelry. These creations can be sold through online marketplaces, local craft fairs, or consignment shops.

Teaching and instruction provide an avenue for sharing knowledge and talents. Retirees can offer private lessons in music, language, or cooking, or coaching in fitness. These services can be delivered in-person or through online platforms, expanding reach to students.

Writing and storytelling allow individuals to leverage life experiences and communication skills. Options include maintaining a blog, self-publishing books, or contributing articles to local publications. This can range from sharing anecdotes to offering expert commentary.

Gardening or homesteading can generate income through the sale of produce, flowers, or homemade goods like jams and baked goods. These products can be sold directly to consumers at farmers’ markets or through local community networks.

Photography and videography skills can be monetized. Selling stock photos, offering local portrait services, or providing event photography are common ways to earn income. These opportunities allow retirees to engage creatively and generate funds.

Income from monetizing skills and hobbies is reported as self-employment income, subject to self-employment taxes for Social Security and Medicare. The IRS distinguishes between a hobby and a business based on profit motive; if conducted with intent to make a profit, it is a business for tax purposes. Even if classified as a hobby, any profit earned is taxable income that must be reported.

For income received through third-party payment networks, like online sales, a Form 1099-K may be issued if thresholds are met. For 2025, the threshold for receiving a 1099-K is $2,500 or more in payments. Regardless of whether a 1099-K is received, all income must be reported.

Generating Income from Property and Possessions

Utilizing physical assets can provide retirees with income streams. Renting out spare space, such as a room, vacation home, garage, or parking spot, generates revenue. Platforms like Airbnb facilitate short-term rentals; local classifieds can connect property owners with long-term tenants.

When renting out property, income is taxable and must be reported on Schedule E of Form 1040. Various expenses, including mortgage interest, property taxes, insurance, and maintenance, can be deducted to reduce taxable income. However, if a personal residence is rented for 14 days or less, the rental income is typically not taxable, and related expenses are not deductible, except for qualified mortgage interest and real property taxes.

Renting out vehicles or specialized equipment can provide income. Peer-to-peer car-sharing applications allow individuals to rent out personal vehicles. Similarly, tools, recreational gear, or other specialized equipment can be rented. Income from these activities is reported as miscellaneous or business income, depending on regularity and intent.

Selling unused items generates income while decluttering. Unwanted possessions, including furniture, collectibles, electronics, or clothing, can be sold through online marketplaces like eBay and Facebook Marketplace. Consignment shops or local garage and estate sales also offer avenues for sales.

When selling personal items, income is taxable only if sold for more than its original purchase price, resulting in a capital gain. If items are sold for a loss, the loss is not deductible. For those regularly selling items for profit, especially if resembling a business, income and expenses are reported on Schedule C. Sales made through third-party payment networks may trigger a Form 1099-K if payment thresholds are met.

For retirees with larger properties, monetizing land is an option. This might involve leasing land for farming, storage, or small-scale events. Income from land use is subject to specific tax rules depending on the lease or activity.

Entrepreneurial Ventures

Starting and managing a small business offers a structured approach to income generation in retirement, extending beyond freelancing or hobby monetization. Retirees can identify business opportunities by leveraging professional experience or recognizing unmet market needs. This could lead to ventures such as specialized consulting, personal concierge services, senior care, or niche online stores.

Initial planning involves defining the product or service, identifying the target audience, and considering operational aspects. This foundational work helps establish a clear direction. While complex, many resources are available to guide new entrepreneurs.

Understanding legal and financial considerations is important for a new business. Many small businesses operate as sole proprietorships, which are simple to establish. In a sole proprietorship, the business and its owner are considered the same entity for tax purposes; business income and expenses are reported on the owner’s personal tax return via Schedule C (Form 1040). This “pass-through” taxation means net profit increases the owner’s personal taxable income.

Sole proprietors are subject to self-employment tax for Social Security and Medicare, and must make estimated tax payments quarterly if they expect to owe at least $1,000 in tax. It is advisable to maintain separate bank accounts for business finances to simplify record-keeping and tax preparation.

Effective marketing and client acquisition are important for any business. Strategies include word-of-mouth referrals, local networking, or establishing an online presence through a website or social media. These efforts help attract customers and build a client base for growth. Many business expenses, such as advertising, supplies, insurance premiums, and professional fees, are deductible, reducing taxable income. The Qualified Business Income (QBI) deduction may also allow eligible sole proprietors to deduct up to 20% of their net business income, subject to limitations.