How to earn money after retirement: Your complete guide

Daftar Isi

And relax. However, longer lifespans and the increasing cost of living mean many people end up thinking about alternative ways to earn an income after retirement.

In April 2021, statistics revealed that about one in seven people in this age group were working.

According to the report, over the past two decades leading up to the report's release, the involvement of women aged 65 and older in the workforce nearly quadrupled, increasing from 3 per cent to 11 per cent.

(ABS).

are (according to ABS):

1. Reaching retirement age or becoming eligible for the superannuation system (31 per cent)
2. A person experiencing a health condition, injury, or disability (13 per cent)
3. The person was let go, retrenched, or there was no job available (5 per cent)

G'day mate, if you're heading into retirement or have already hung up your Akubra, and you're keen to know about some top ideas to bring in a bit of extra dosh in your golden years, here's the lowdown.

What's the most reliable way to earn money in retirement?

Most Australians rely on a pension when they retire, with data from the Australian Bureau of Statistics showing it's the main source of income for 43.3% of retirees. In contrast, 25.8% of people have superannuation, an annuity or a private pension as their main source of income.

There are also other sources of income in retirement, including rental property income, other investments and paid employment. So, there isn't one 'best' source of income – it depends on things like your financial situation, personal circumstances and goals.

“Are you looking for the most dependable, the longest-lasting, the most tax-efficient, or the one with the best return on investment?”

He reckons some types of income are better than others.

“Focusing on income from investments, the best option would be to draw down from a super fund, that's for sure,” he says.

Lachlan Anderson, Partner & Financial Adviser at Discover

“He says you can have this money sent to you at regular times, like every two weeks or every month, and you can change how often you get it as you go along,”

“Another form of a superannuation income stream is an annuity, which is a bit less flexible but still meets the requirements for a reliable and tax-free income.”

Unlike standard superannuation, an annuity is a fixed type of income that isn't linked to the share market. You can purchase an annuity with your savings or super and will receive a guaranteed income for a set period.

What about other sources of superannuation income?

Dividends or interest, rental property income, and income from an individual or an unincorporated business are other types of income that the ABS monitors. Put together, they account for around 6.7 per cent of the main source of income for Australian retirees.

So, basically, these sources of income can be a good fit for some people, but they might not be suitable for everyone.

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“However, rental income is subject to tax, and many investors will know that rental income isn't always guaranteed, with tenants moving out and unexpected expenses arising from time to time.”

Dividends are another type of income you can receive if you invest in the share market.

“Dividends from publicly listed shares, like the Commonwealth Bank, for instance, can also be a good source of income, as often this will be received tax-free for a retiree because the companies themselves have already paid tax,” Lachlan says.

“However, this might not be as trustworthy, given that the company paying the dividends can decide after each financial reporting period how much they'll pay.”

Dividend payments usually occur once or twice a year, which can make it tricky to manage your finances if you're counting on dividends as your main source of income. By contrast, interest can come from your savings or investments, such as bonds.

But, if you're looking to earn money from something other than an investment, a part-time or casual job, also known as a side gig, is definitely worth looking into.

“G'day, the best non-investment income's gotta come from something you're passionate about and that brings you a sense of enjoyment,” Lachlan says.

What's a good side gig for someone who's retired?

A good side job for anyone is something that you can enjoy doing while getting paid for it.

“Maybe it’s a natural progression of the skills you've picked up over your career, or perhaps it's in a field that you're really passionate about,” Lachlan says.

If you're looking for motivation, here are some side hustles you might want to consider when you've retired:

• Tutoring
• Having a background in the industry and connections with people who've worked in it before can be beneficial when seeking consulting work.
• Freelance writing or photography – you might find opportunities on websites like Upwork, Fiverr and Pixpa.
• Babysitting - you'll probably need a First Aid and a Working with Children's check. Have a look at what your local government requires.
• Pet-sitting and dog-walking services are available through websites such as MadPaws and Pawshake.
• House-sitting
• Gardening and home maintenance (i.e. 'handyman jobs')
• Selling plants, flowers, or handmade items like craft products – think ceramics, knitted clothing, sewing projects, or baked treats.
• Cleaning
• Bookkeeping
• Ridin' and/or deliverin' – such as Uber and MenuLog.
• You can snag some top-notch second-hand goods at op shops, tip shops, or even Facebook Marketplace, and give them a revamp to sell for a tidy profit.

Having a job with flexible hours is a good way to achieve financial stability in your retirement years.

“Having a casual job can be a great way for a retiree to earn some extra cash, says financial planner Alex Jamieson.

“Part-time and casual jobs are perfect for retirees, as they can top up their income in a way that fits around their daily routine.”

What are some common challenges faced by people trying to earn a living in their retirement years?

Retirement can be a unique experience for each person. However, being aware of some common difficulties can help you avoid or at least lessen their effects.

Here are a few things to keep in mind:

1. Not having enough funds when you retire

This basically means not having enough super or other assets to cover your daily living expenses and other costs.

“This can put a huge financial pressure on one’s income over the retirement period, and it can also threaten the retirement savings from being used up much earlier than one’s expected lifespan.”

Earning extra money from a side hustle or part-time job while you're retired is a way to top up your existing retirement funds. Another option is to delay retirement.

“Working for a longer period of time before retiring can make a big difference in avoiding financial struggles during retirement,” Alex says.

2. Lack of self-assurance when starting something new

When it comes to earning income in retirement, Lachlan says heaps of people just don't have the confidence to get going.

“Fair dinkum, the solution to this challenge is often as simple as just getting on with it and starting,” he says.

“Gobsmacked by the idea of starting a side hustle? No worries, just give it a fair dinkum go for a start. If you've got a mate heading off on holidays, ask if they'd be keen to leave their pet with you and sort out a fair payment. If you reckon it's a ripper of an experience, let the neighbours know you're happy to lend a hand. Or chuck it up on the local Facebook page and see how it takes off. You'll never know how big it could become if you don't give it a crack.”

3. Uncertainty about income needs

A lot changes when you retire, including tax obligations and income reporting requirements related to your pension:

“People are put off by not understanding the rules around earning an income and receiving the age pension, or paying tax. My first piece of advice is to just start, and once you're earning some money, you can work out the implications for these things,” Lachlan says.

“I can confirm that retirees are free to earn some income from work and still get the age pension, and depending on your overall financial situation, you might not have to pay any tax either. Importantly, every situation's different. To get a proper answer to these questions, you should talk to a financial advisor.”

You can find clear details on how much you can earn before payments start being affected.

“If you've got queries about setting up your business structure and more complicated stuff, you can have a chat with an accountant or a financial advisor. But if you're just after a little extra cash, not trying to build a multinational empire, then sorting out the finances for a side hustle shouldn't be too hard.”

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