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4 Unconventional Ways to Fund Your Retirement

The Motley Fool logo The Motley Fool 12/27/2021 Kailey Hagen

Diligently saving and investing your money is the best way to fund your retirement, but let's face it: That's not always easy. Those who aren't able to save as much as they'd like to every month may feel like they're doomed to continue working or else they'll struggle to get by in retirement, but that's not always the case. Sometimes, you can find some extra cash just by thinking outside the box.

Here are four unorthodox ways to fund your future you can consider adding to your retirement plan. 

Person sitting on floor in front of laptop looking at documents © Getty Images Person sitting on floor in front of laptop looking at documents

1. Turn a hobby into a business

For some, retirement means never working again, but for others, it just means leaving their old 9-to-5 behind. If you fall into the latter group, you might consider looking for a different job in retirement that's more in line with your interests.

Going into business for yourself gives you the ultimate freedom, but it can put a lot of pressure on you too. You have to be comfortable promoting your business and managing its finances as well as doing the actual work required. 

It can also take a while to establish a strong company, so you may want to begin this process a few years before you retire so you're earning a steady income from your side business by the time you quit your regular job.

If that all sounds too stressful, you could look for a side hustle that gives you flexibility without putting all the pressure of running a business on you. That could mean driving for a ridesharing company or walking dogs. Think about what appeals to you the most and how you could turn that into an income.

2. Sell some of your possessions

One way to get a quick influx of cash is to sell old items you no longer use. This could be as simple as clothes you don't wear anymore all the way up to an old house that's too big for you. If you're not attached to something, consider getting rid of it and putting the resulting extra cash into your retirement savings.


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You won't be able to stash these funds in a 401(k), but you could put the money into an IRA. Just don't exceed the $6,000 annual contribution limit ($7,000 if you're 50 or older). Or you could increase your 401(k) contributions and use the cash you're earning from selling your possessions to help you cover your bills today.

This is a short-term strategy for boosting your savings, but it still shouldn't be overlooked. Every dollar you set aside for retirement helps, especially if you still have a few decades before you need to call upon your savings.

3. Buy rental properties

Those who have some extra cash on hand should consider investing their money in rental properties they can carry into retirement. These could be long-term rentals or, if you live in a popular vacation destination, you could do short-term rentals instead.

Investing in rental properties has a big upfront cost, but you'll have rental income to help you offset the cost of the mortgage. And once the house is paid off, you'll have a steady stream of income you can spend on whatever you want.

You will need to keep some cash on hand for emergencies, though. As a landlord, it's up to you to fix home systems and appliances when they break, so you must budget for these. If that sounds like something you don't want to deal with, one of the other funding methods on this list might suit you better.

4. Consider a reverse mortgage

Seniors 62 and older who have substantial equity in their homes can consider a reverse mortgage. If you decide to do this, the bank will pay you money in either a lump sum, monthly payments, or a line of credit. You can draw upon this to help you cover your expenses in retirement, and you won't have to worry about making any monthly payments on the loan as long as you live in the house.

The catch is, when you move away or die, the full balance of the loan comes due. This includes interest and fees on top of the principal balance. It may not be a problem if your heirs aren't interested in your home, but if they hope to keep it, they'll have to take out a loan themselves to pay back the reverse mortgage. 

How much you can borrow is limited by how much your home is worth and how much equity you have, but the proceeds you receive from your reverse mortgage are tax-free. If you want to keep the loan in good standing, though, you must carefully maintain the property and pay your insurance and property taxes regularly.

The four options listed here aren't all going to appeal to you, but hopefully they've got you thinking about some less conventional ways you can fund your retirement. Experiment with any of the suggestions that appeal to you and see if you can brainstorm a few more.

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