Early retirement is a dream that many share but few are able to pull off successfully. The average worker expects to need around $1.8 million to retire comfortably, according to a 2024 survey from Charles Schwab, and that figure could be even higher for those retiring early.
However, having a side hustle can make early retirement more attainable. Flexible work options can give you more freedom to travel and enjoy leisure activities, and with an extra source of income, you won't need to pull as much from your savings. Here are a few choices for those looking to ditch the 9-to-5.
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1. Invest in dividend stocks
Investing in dividend stocks can build a source of passive income while also strengthening your retirement fund. A dividend stock is an investment that makes payments to shareholders, known as a dividend, on a monthly or quarterly basis. You'll receive a dividend payment for each share you own, so the more you invest, the more you can earn.
Dividend ETFs are another option. An ETF is a basket of securities bundled together into a single investment, sometimes containing hundreds or even thousands of stocks. A dividend ETF, then, is a fund that contains only dividend stocks.
Exactly how much you could earn depends on where you buy and how much you invest. For example, the Vanguard High Dividend Yield ETF (VYM 0.59%) most recently paid a dividend of around $0.86 per quarter, or around $3.44 per year, for each share.
That may not sound like much on the surface. But if you were to buy just one share per month and reinvest those dividends over several years, you could eventually rack up thousands of dollars per year in dividends alone. Not only does that provide a stable source of passive income, but it can add up to hundreds of thousands of dollars in investment gains, too.
2. Freelance
Contract work has surged in popularity in recent years, as remote work has made it easier to find flexible side hustles. A 2023 report from Upwork found that freelancers make up 38% of the U.S. workforce, and media platform Substack also saw paid subscriptions triple between 2021 and 2024 -- suggesting that there's growing demand for niche newsletters.
Freelancing can be particularly lucrative for older adults, as you likely have a lifetime's worth of knowledge and skills to share. Through online newsletters, blogging, consulting, and other forms of freelance work, you can get paid for sharing that knowledge.
3. Rent out your home or car
The average Airbnb host earns around $14,000 per year from rentals, according to a 2024 report from the company.If you plan to travel extensively during retirement, renting out your home while you're gone can help you earn some extra income.
Similarly, if you have a car you're not using regularly, some companies will let you rent it out for passive income. Car-sharing company Turo reports that the average owner earns more than $600 per month for renting out a car, with some owners earning thousands per month by sharing multiple cars.
There are plenty of creative ways to earn income outside of a traditional job. By building a portfolio of passive income streams and taking advantage of flexible work options, early retirement can become far more attainable.
