How to Supplement a Retirement Income

You’re not by yourself — a lot of us are asking how to supplement a retirement income these days. While some retirees need the extra income to exist, others see how additional income would make life better for themselves and their family. Still other people are bored and look for new activities to fill the void of life in retirement. 

No matter which camp you’re in, there are plenty of options for supplemental income after you’ve retired. So whether you want to work or feel like you’re forced to look for additional income — check out the ideas in this post.

How To Supplement A Retirement Income

I don’t believe it matters why you want or need to supplement your income? The fact is most people find it a challenge to make ends meet after they’re retired. The important thing now is to “think outside the box” and find something that makes you feel good about yourself and helps meet your financial needs.

Even if nothing hits the spot for you, there is a good chance that going through the options below will spur a few income-producing ideas of your own. Just remember: ideas rarely change circumstances — you’ll need to take action to increase your income.

Reverse Mortgages

HECM Reverse Mortgages can change the lives of seniors and retirees who own their home. With a reverse mortgage, you can remain the owner of your home while receiving monthly tax-free checks. You can receive this payout for a set period, or for the rest of your life. 

If you are at least 62 you get to use the equity of your home without selling it or refinancing it. That’s hard to beat! Take the money in a lump sum, monthly payments, or as a line of credit. Taking a line of credit allows the money you’re not using to grow over time.

Here are a few features of using the HECM program as supplemental income:

  • You take the equity and don’t pay it back
  • You are the owner as long as you live
  • No taxes on the equity loan
  • Your equity money has no effect your Social Security Benefits
  • The HECM Reverse Mortgage is an FHA regulated and insured project

A reverse mortgage supplements your retirement income by your taking advantage of the equity in your home. The equity you‘ve built until now is useless to you without taking it out as a monthly paycheck to spend during retirement.

For more in-depth information on HECM Mortgages check out this post on supplementing your retirement income.

Supplementing a Retirement Income with Life Insurance

When your retirement income just is not meeting your monthly expenses or an unforeseen financial need occurs Life Insurance policies may save the day? You may have a life insurance policy you purchased years ago that could generate the supplemental income you need today. 

With either a Whole Life or Universal Life policy it’s possible to have a substantial amount of accumulated savings. Here are two ways to consider using that cash as additional income:

#1. Cash Withdrawals

Cash withdrawals are going to close your life insurance policy because you remove the equity. But sometimes we took out life insurance when our families were young and we no longer need it for a death benefit. If that’s the case for you, old life insurance policies make a great supplemental income in some cases?

It’s possible to have surrender charges or penalties for cashing out your life insurance if the policy isn’t very old, but it should be tax-free now. Penalties are usually in place only in the beginning years of a policy and dissolve over a set number of years. 

#2. Loans from Life Insurance

With a loan against your policy, you keep the insurance in effect while you use the built up equity. You’re borrowing against the cash value of the policy intending to pay it back. The money is yours, but if you die before it is paid back, the policy value is deprecated that amount. 

When you supplement your income with a life insurance policy loan, you can pay it back at your convenience. However, if your family or financial obligations are still depending on it, and you are still paying premiums you can have them adjusted to repay the loan.

Be sure to investigate all the possible penalties, tax problems, policy structure, and outcomes to your self and family before changing your life insurance. 

Working Part Time

Retired people everywhere are working at a variety of part-time jobs. Face it, if you‘ve been in the workforce long enough to retire you have skills that many employers are looking for every day. All employers will not welcome senior citizens, but you may be surprised at how many and who welcomes your application or resume.

My advice to you is to take courage and look for well paying and challenging work you enjoy. A lot of us worked a lifetime at jobs and careers we weren’t that fond of just to support our families. In retirement, you now have the opportunity to change your mindset and pursue your passion.

It‘s time to do something you love — and you can find it. Try spending time with a pencil and paper and make a list of things you love doing and things you would love to try doing. Here are a few ideas to get you thinking of possibilities;

  • Got hobbies or skills you could monetize? Have you learned how to do light home repair work in your life? Maybe you could turn your knitting skills into a cash business? If you are bi-lingual there‘s plenty of opportunities in both private and public institutions?
  • Retirees have the time now to help other senior citizens and disabled people get around town? What about taxing people, picking up groceries, delivering packages for businesses?
  • Temp agencies offer a wide assortment of jobs. You could supplement your income while stating your work hours and days before you get started. Let the temp agency find the perfect work for you.
  • More people own pets than ever before, so you might start your own pet sitting business, or even get paid for taking pets to groomers and vets?

Start Your Second Career

There seems to be two categories of retired people thinking of starting a second career:

  • People who don’t have enough savings combined with Social Security to retire
  • Those who are living comfortably in retirement, but like staying mentally active, still chasing the dream, or just like something to keep them busy.

When it comes to starting a second career, an online business is by far my personal favorite. The potential is outrageous, and the cost to get started is insignificant for most people. 


Internet marketing has the potential to change your financial situation forever at best, is interesting and fun with little expense at worst. Affiliate marketing is the best way to get started online. It comes with the highest earning potential and grounds you for any other direction you decide to go online. 

However, starting your own business of any kind online as a second career rarely creates immediate income. So if you are in an emergency situation for money, this is probably not the time?

Renting Rooms to Supplement Your Income

Many retired individuals have empty rooms in the house that could be rented for extra income. Renting a home for a single person is expensive. You may already know another retired that would love renting a bedroom in your own home. 

Supplementing your retirement income isn’t the only advantage to renting rooms either. If you’re single now, having company could be great for beating depression and loneliness?

Sell Your Home

For some of you, selling your home to supplement your income will seem like the most foolish idea you‘ve heard lately? But the fact is that people in retirement often find themselves alone in a large home that requires constant upkeep.

A good place to decide if selling your home would be a wise decision is to look at how much a month it cost to stay. Add your yearly taxes, insurance, and repair and maintenance cost – divide by twelve, and you may be surprised at your monthly expense. You can see that just having your home paid for doesn’t mean you will stop spending.

If that’s you, either renting part of your home or outright selling it could be a viable option for changing your financial situation. There is a lot of considerations to consider, but taking the cash out of your home and renting could be a good move.

Making Money from Cooking

Have you spent a lifetime honing your skills in the kitchen? Chances are good that if you‘ve cooked for your family, you have experience and a few special dishes other people love.

Maybe you don’t have that much experience, but would love to learn to cook? 

Either way, you may not realize the ongoing demand for someone willing to do the cooking? Most of the population, mothers, fathers, and single people work and have little time for grocery shopping and cooking meals. 

Are you in a perfect position to cook meals in your own kitchen and maybe even deliver them? Go here and read about starting your own catering business on Wikihow to supplement your retirement income.

People Will Pay for Gardening and Yard Work

The same as people don’t have the time or the inclination to cook, they simply don’t have time to keep their yard as beautiful as they would like? If you love working in the yard, this may be your after retirement calling?

To tell you the truth this income producing avenue is in such demand now, that as a retiree you may not even need to do the labor. Because most outside yard work is done in the summer month, you could hire school kids and supervise them as they do the yard work. When it comes to tools, what you don’t have already could be bought as your business grows and brings in more money.

Inside Plant Care Supplemental Income for Retirees

Here’s a great method of making that extra income you may not have considered? Start an interior plant care business! Both businesses and private homes love having live plants and flowers inside, but few people actually take care of them. A couple of ways to get started are:

  • Charge by the visit or month to merely check on, water, and fertilize the plants
  • Write a contract for you to provide the plants and water, fertilize, prune, and nurture with a guarantee that if the plant looks bad or dies you will replace it free.

Taking care of interior live plants can be a great way to supplement your income if you have a green thumb. Now that you’re retired you have the time to call on businesses and homeowners that you know love plants inside. 

Knowing how to supplement a retirement income is usually just a matter of having ideas and the willingness to pursue them. If you didn’t see anything in this post that interest you, try keeping a pen and paper handy (maybe a little notebook in your pocket) and write a few ideas that come to mind. 

Write everything that comes to mind, even the most outlandish and improbable ones. It won’t be long before you hit on something to supplement your income that you enjoy doing in retirement.

Read this post for more ideas about making money after you retire and please leave me your favorite ideas for supplemental income in the comments below.


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