Nearly half of baby boomers have no retirement savings, a survey from the Insured Retirement Institute found. Retirement is supposed to be one of the best periods of your life. But if you're struggling financially, that can put a damper on your senior years.
While one way to increase your retirement income is to pick up a part-time job, not everyone wants to work in retirement. The good news is that there are a few passive income sources that can give your savings a boost with little effort on your part.
1. Turn your hobby into a business
Chances are you're going to spend plenty of time enjoying your hobbies in retirement. So why not try to make some money off of them?
No matter what you choose to do for fun, there's likely a way to turn that hobby into a business. If you love to write, consider starting a blog about a subject you're passionate about. If you enjoy teaching others, create YouTube tutorials about your favorite topic. Whether your passion is playing guitar, painting, cooking, or anything in between, there's likely an audience out there craving more information.
Of course, turning a hobby into a business will require some legwork up front before you start seeing the money roll in. But if it's a hobby you enjoy, it may not feel as much like work. Then once the business has been established, you can earn passive income each month.
2. Invest in dividend-paying stocks
Dividend stocks are investments that pay shareholders a percentage of the company's profits (or a dividend) every month or quarter.
How much you can earn in dividends depends on the companies you invest in, as well as how much stock you own. For example, say you own 100 shares of a company with a stock price of $100 per share. If that company pays a dividend of 5%, you'll receive $5 per share, or $500 per year. That may not seem like much, but the more shares you own and the more companies you invest in, the more you'll receive.
Choosing which stocks to invest in is crucial, because not all dividend-paying stocks are created equal. If you're just starting out, you may opt to invest in the Dividend Aristocrats. These are a group of companies that have each increased their dividends every year for at least 25 consecutive years, making them more stable investments for retirees.
3. Downsize to a smaller home and rent out your current home
Downsizing to a smaller home can boast several benefits in retirement. For one, it can reduce your mortgage payment each month. In addition, it can reduce the amount you spend on upkeep and maintenance. Finally, it can give you a chance to purge all those miscellaneous items you've been storing in the basement or spare room. When you don't have as much space in a smaller home, that can encourage you to sell or donate the things you don't need (as well as discourage you from buying more stuff you don't have room to store).
You could stand to earn even more in passive income if you choose to rent out your current home rather than selling. This is a particularly smart option if your mortgage is already paid off, because you could potentially earn hundreds or even thousands of dollars of profit each month by renting out your home.
Boosting your income can make for a more enjoyable retirement, but you don't necessarily need to go back to work to make more money. By taking advantage of passive sources of income, you can pad your savings with less effort.