There's a good chance that you'll need additional income in retirement. Social Security, for example, will probably deliver less income than you expect. The average monthly retirement benefit is only $1,560 -- just $18,720 per year.

Here are three sources of income that you may not have thought about.

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1. Your home

Your home may offer multiple sources of income. For starters, you may be able to rent out rooms or the whole house for parts of the year through services such as Airbnb or Expedia Group's VRBO. Much will depend on how much space you have, of course, along with your ability to make that space available and the desirability of your location.

Next, you may be able to secure a reverse mortgage as you approach or enter retirement. It's not for everyone, but a reverse mortgage is essentially a loan, where you receive a lump sum or regular, dependable income as long as you live in your home, after which point the loan will have to be repaid, often by selling the property.

Another way to get additional retirement income out of your home is to sell it and buy a less costly home. For example, if you can sell your home for $500,000 and buy a $300,000 home that's either smaller, less fancy, or in an area with a lower cost of living, you may be able to generate close to $200,000 in income -- a sum that can go a long way toward supporting you in retirement.

2. Annuity income

Annuity income is an option many don't consider, but it's worth doing so. There are problematic kinds of annuities, such as variable annuities and equity-indexed annuities, but fixed annuities -- which can be immediate or deferred -- are simpler and more straightforward.

With an annuity, you typically pay an insurer a hefty sum in exchange for regular, dependable income. It can be structured so that it continues until both you and your spouse pass away, or it can be tied to just one life. You may be able to add inflation adjustments (at a cost), among other things.

Here's an idea of what kind of income some people may be able to buy via an annuity these days:



Monthly Income

Annual Income Equivalent

65-year-old man




65-year-old woman




70-year-old man




70-year-old woman




65-year-old couple




70-year-old couple




75-year-old couple




Data source: 

Annuities are a great way to ensure that you don't run out of income in retirement, so consider learning more about them.

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3. Your health savings account

Finally, there are health savings accounts (HSAs), which few people think of as retirement accounts. But they can be used as retirement accounts, because the money that you (and perhaps your employer as well) put into them isn't there on a use-it-or-lose-it basis. It can stay in the account, accumulating and growing, as it can be invested in stocks or other things while it's there.

It's meant to allow you to pay for qualifying healthcare expenses on a tax-free basis, but if you don't spend it all, once you turn 65, you are allowed to spend it on anything. Whatever you spend on non-qualifying healthcare expenses or on non-healthcare expenses will count as taxable income to you, just like withdrawals from a traditional IRA or 401(k) account.

Many retirees have significant healthcare expenses, though -- so there's a good chance you'll be able to cover many qualifying healthcare bills with your HSA account.

More sources of retirement income

Those are just a few of many possible sources of retirement income you may be able to use. Here are some others:

  • Paying off high-interest rate debt: Whatever you pay off now will not be costing you in interest expense in the future, thereby freeing up income.
  • Investing in dividend-paying stocks: This is an obvious strategy and an effective one. For example, if you have $300,000 invested in a bunch of dividend-paying stocks with an overall dividend yield of 4%, you're set up to collect $12,000 per year -- a sum likely to rise over time as dividend payouts are increased.
  • Delaying retirement by a few years: This strategy will allow you to save and invest more, which means your nest egg will have to support you for fewer years. Delaying starting to collect Social Security, meanwhile, will make your benefit checks bigger.

Take some time to think about how much money you'll need in retirement and how you'll amass it. Develop a plan so that you don't end up trying to live on far less money than you need.