According to Prudential's 2016 Retirement Preparedness Study, 54% of Americans nearing retirement age "have no idea" how much money they'll need for their post-career years. What's more, the same percentage of Americans nearing retirement only have $150,000 saved for their so-called "Golden Years" - nowhere near enough cash to live on for 20 or even 30 years of retirement.
That's where part-time income can help beef up retirement savings. But what are the best income-producing options in retirement? Here, from the mouths of experts are a "working" retiree's best bets.
With real estate prices and health care rising, and with interest rates on an upward spike as the U.S. economy gathers significant strength in 2017, retirees - and near-retirees - may wonder just how far their household dollar may stretch in retirement, especially here in the U.S.
One antidote is to do what 400,000 retirement-minded Americans are doing and find a comfortable, affordable landing spot overseas.
After all, Florida and Arizona aren't the only places on earth with plenty of warm sunshine, palm trees, good food and friendly people - they just happen to be among the most expensive retirement destinations.
Change that dynamic, passport in hand, by opting for one of the global locales to add some international luster to your golden years - straight from the mouths of ex-pats who live there.
Editors' pick: Originally published June 6.
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Must watch digital TV: Apple (AAPL - Get Report) CEO Tim Cook will deliver the commencement address at the Massachusetts Institute of Technology on Friday. He has big shoes to fill after a well-received speech by Facebook FB founder Mark Zuckerberg at his alma mater Harvard.
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Working just 12 hours a week at $10 an hour would net close to $500 in a month, says Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network. In addition, many retail stores offer employee discounts on merchandise purchased there, Gallegos adds. "If you're working at a place where you regularly shop, that's an added financial benefit," he says. Also, some companies do offer a range of benefits to part-time employees." Retirees can also look into contract work helping a catering company. "That can be especially in demand as the holidays approach," Gallegos adds.
Making a buck or two off of Wonder Woman or Spiderman is highly doable, says Vincent Zurzolo, co-owner of the New York-based Metropolis Collectible, the world's largest vintage comic book dealership. "Interest in comic books is on the rise, fueled by both the prevalence of top-grossing movies featuring comic book characters and the increasing popularity of events like Comic Con," Zurzolo notes. "For example, attendance at Comic Con International: San Diego grew from 300 in 1970 to 130,000 in recent years." It's not just the older books you might find in the attic that are valuable, he adds. "Even comic books from the last 10-20 years are becoming more collectable," Surzolo states. "Some comic book values have jumped from just a few dollars five years ago to $50 to $100 today. Smart investors are finding that they can make money off of this trend, but only if they treat it like any serious investment."
Technology is creating ways for seniors to earn extra income, says Rob Stephens, a tax expert at Avalara MyLodge Tax, a tax compliance firm that serves the vacation rental industry. "One really good and increasingly common option is to rent your home or second home to guests," Stephens says. He points to websites like HomeAway, VRBO or Airbnb, which have become "very popular" with senior homeowners looking for some extra income. "Short term renting on these websites gives hosts and homeowners the option to potentially pay off their mortgage for free, getting rent from travelers, subsidize the purchase of a rental home, or simply have an additional source of income," Stephens notes. "As of April, senior hosts had earned a collective $747 million in income by joining the Airbnb community."
Capitalize on your years in business and offer professional consultancy and advisory services in your field of business, says Paul Dillion, founder of Dillon Consulting Services in Durham, N.C. "For those who are considering retiring early and have an expertise, one of the best ways to make money in retirement is to become a consultant," Dillon says. "Becoming a consultant on your own, via a sole proprietorship, in your field of endeavor, offers a chance to set your own hours, and work at your own pace, while making an income." So, get going and create a website, advertise in industry trade publications and digital platforms, and get the word out - your advice can lead directly to a better bottom line for companies in your old industry.
There is a burgeoning demand for teachers across multiple platforms, says Vikki Walton, a 59-year-old retiree who teaches quilting classes and who speaks and writes regularly on vocational guidance. "Teaching is the number one way to earn money in retirement," Walton states. "As Boomers age, so will their physical abilities. However, they have knowledge they can pass on to others." Walton says that teaching can take many forms - from in-seat classes at a community college or local adult-education center, at online platforms (Udemy, Teachable, Thinkific are just a few potential sources,) or by writing a blog or a book. "All of these return to the crux of teaching," she adds. Also, if someone doesn't want to create their own product, there is also teaching English online and tutoring opportunities in myriad subjects. "Plus, once a person puts a course online or writes a book, it becomes a self-generating source of income," Walton says.
Global resorts love to hire experienced people as hosts, guides, and managers, notes Scott Hanson, senior partner and co-founder of Hanson McClain Advisors, a Sacramento.-based financial advisory. "Club Med likes to boast they have 6,000 employees over the age of 65 working in their 80 properties worldwide," Hanson says. "This is a great option for someone who wants to retire aboard, but still make extra money." If you select a location with a lower cost of living than the United States, you'll have an opportunity to spend less money and bring in additional income as well. "That's the best of both worlds, because money not going out is the same as money coming in," he adds.
Another tip from Hanson - if you're someone who enjoys your job, but wants to have more freedom, negotiating a reduced schedule in your early retirement years is a great option. "Work with your employer before retiring to create a reduced schedule," Hanson advises. "That allows you to have more time to do what you love, but also gives you the option to stay in your current job." Employers benefit, too. "Keeping you on board helps companies because they don't lose someone who likely thoroughly knows and understands their business," he says.
Retirees can earn extra income by renting out their boat or becoming a tour boat captain in order to offer charters, says Jess Segraves, marketing manager at GetMyBoat, in the San Francisco Bay area. "Boats are seldom used, expensive to purchase and maintain, and retirees are often the most likely demographics to own boats," Segraves explains. "While people might not want to give up their boats in retirement, there are ways to offset the cost of boat ownership, and renting it out is one of them." Segraves says her company can help - GetMyBoat has handled over 66,000 rentals in 171 countries. "When you do rent, look for the lowest service fees when you do rent your sea craft, as that means more money paid out to boat owners," she adds.
With the advent of the Internet, and the resulting huge demand for digital content, being a freelance writer is a great (and fun) way to make extra dollars in retirement, says Ruta Fox, a Greenville, S.C. resident and retiree who writes regularly, for good pay, in the entrepreneurial, food, travel and lifestyle markets. "It's not stressful at all, and I get to choose how much to work and what I want to work on," she says. "Additionally, I write websites and press releases, and because I was a magazine editor, I can pitch for my public relations clients, too. It's a real nice mix."
"Older Americans have accumulated $6.2 trillion in home equity or an average of more than $200,000 per senior household," says Reza Jahangiri, CEO of American Advisors Group, a financial services company located in Orange, Calif. "At the same time, there's a widening gap between senior income and expenses. It's clear that home equity has to be part of the solution, whether it's reverse mortgage loans, home equity lines of credit, relocations, or other options."