5 top side hustles for retirees: How to bring in extra income now
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Seniors and retirees are perfectly positioned to start a side hustle. Years of experience and a little extra time on their hands mean they are ripe for utilizing their skills to earn some extra cash. In fact, a 2019 Bankrate survey on side hustles found that nearly 28 percent of all side hustlers were baby boomers.
Side hustles are a great way to supplement what you’re already receiving from Social Security or investment accounts as an alternative stream of income. Most of the time, you already have a skill or object of value — it’s just about figuring out how to get it working for you.
Best side hustles for retirees
1. Rent out a space you already have
Whether it’s through an online platform such as Airbnb or a private agent, if you’re a senior who owns multiple properties but only uses them at certain times of the year, renting out your place can net you extra cash. Rental homes recently became high in demand as the supply of available homes declined and people were forced into rentals. Some platforms that allow opportunities to rent out your home include Peerspace and Silvernest.
Companies like Peerspace and Airbnb are geared more toward short-term rentals, which are flexible, but might include things like space sharing and cater more to unpredictability.
More traditional long-term rentals can offer more stability, but will lock in a rental rate for a longer period of time, compared with a short-term rental where you can more easily take advantage of changing demand.
2. Provide child care
Whether through your own experience raising children or because you just happen to love being around little ones, providing much-needed child care to busy families can bring in extra income.
Care.com and Sittercity are some of the more well-known services where willing babysitters can upload a profile of their credentials and experience in order to find work taking care of children. Another site, Rent A Grandma, allows seniors to provide services like childcare, pet sitting, and even cooking to families who are looking for someone with experience and a special touch.
3. Leverage skills you already have
One of the best ways to make money on the side once you retire is to leverage the skills you learned during the decades spent working in your career. Whether you were a teacher, accountant or artist, you can monetize your specialty online.
Websites like Upwork, Fiverr and TaskRabbit allow for opportunities to sell any service from writing a blog post, to organizing a filing cabinet or teaching a literature lesson. Virtually any skill can be transferred to the online marketplace, and no task is too menial. Some users of these platforms hire people to be their administrative assistants for a couple of months or turn to people with consulting experience to advise on a few of their projects. Use what you’re already familiar with to bring in extra cash.
4. Sell things you already own
One man’s junk is another man’s treasure, especially when it comes to online selling. Well-known platforms like eBay, Amazon and Etsy can be goldmines if you position your items for sale correctly.
Whether it’s furniture, old paintings, vintage clothes, classic cookery or jewelry, you can probably sell some of the old things you no longer use for more money than you think.
5. Learn how to resell
Many successful online sellers find products to buy at places like TJ Maxx or Marshalls, or through sales and liquidations, and then resell them for significantly more money on Amazon and other online marketplaces.
Sometimes called “retail arbitrage,” the process can be a great way to earn extra money while going at your own pace. You can choose to sell as much or as little as you want.
Tax implications to consider
As with any source of income, taxes will need to be accounted for. According to the IRS, you will need to file a tax return if you have yearly net earnings from self-employment or “gig” work (your side hustle) of $400 or more. This also includes part-time or temporary work.
Independent contractors operate on their own, usually on a contractual basis, to provide a predetermined service. Doctors with their own practices or accountants, for example, are often independent contractors. Generally, an individual is viewed as an independent contractor if the person paying the contractor has the right to control the result of their work, but not what will be done and how it will be done.
A good example is a freelance artist. You might commission an artist to draw a painting of a building (the result) but have no true control beyond that point — it is up to the contractor. The IRS says if you are an independent contractor, then you are self-employed. This has certain tax implications that are important for anyone starting a side hustle to know.
If you earn money from side hustles as an independent contractor, you might have to pay quarterly estimated taxes. This means you will have to withhold tax from your employee paycheck on your own, as your employer does not do it for you. You will need to fill out a Form W-4 Withholding Certificate and give it to your employer.
If you are your own employer, then you will simply need to pay estimated tax four times a year — but make sure to get it in on time.
The due dates each year are typically around:
- April 15 (for work done between January 1- March 31)
- June 15 (for work done between April 1 – May 31)
- September 15 (for work done between June 1 – August 31)
- January 15 (for work done between September 1 – December 31)
You can use the IRS tax-withholding estimator to calculate how much you might owe.
If you sign up to use services like Fiverr or Upwork where you receive payments from third parties for services rendered, you will be supplied with a Form 1099-K to report transactions. All transactions in which you earn money, even if it is something as simple as selling a homemade knit sweater on the internet, qualifies as income. But there is a minimum threshold before the amounts need to be reported to the IRS.
The federal IRS reporting requirements recently changed. They are as follows:
- For transactions before year 2022: Gross payments above $20,000 AND more than 200 transactions need to be reported.
- For transactions after 2021: Gross payments that exceed $600 AND any number of transactions.
The reporting requirements were far more lenient before 2022. A surge in the gig economy (and thus potential tax evasion) saw the IRS become more stringent in its reporting requirements for self-employed workers and those with side hustles. It’s important to keep on top of how much you are making from your side hustles in order to avoid any problems come tax time.
The 1099-K form includes all reportable payment transactions. For 2022 and beyond, this means ALL transactions and payments you receive from your side hustle in excess of $400.
Side hustles are a smart way to invest your time to net you extra income after retirement. Leveraging skills you’ve acquired throughout your career or your specific passions can bring in extra money to create a stream of alternative income during your golden years.