Leslie Massey
Retirement is a time to enjoy life, but it can also be a time to pursue new passions and make extra money. Many retirees in Australia want an additional source of income during retirement, rather than relying on a pension or superannuation. There are many ways to make money in retirement, from pursuing a passion project to downsizing one's home. For those who want to continue working, there are options such as transitioning to retirement, retraining or changing careers, and part-time or casual work. Others may want to turn their hobbies into a small business, freelance their skills, or become a consultant.
| Characteristics | Values |
|---|---|
| Continue working | Transition to retirement, retrain or change career, work bonus, senior concession cards |
| Government benefits | Age pension, service pension, tax offsets |
| Downsize home | Rent out a room, take in a boarder |
| Volunteering | GoVolunteer website |
| Superannuation | Lump sum, income stream, tax-free retirement phase accounts, transfer balance cap, minimum withdrawal amount, tax implications |
| Side hustles | Freelance writing, consulting, tutoring, selling products of hobbies, teaching a class in a retirement village |
| Investments | Rental income, dividends from publicly listed shares |
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What You'll Learn
Part-time work
Retirement is a time to enjoy life, but it can also be a time to pursue new passions and make extra money. Many retirees find themselves needing or wanting to generate income after leaving full-time work. There are many ways to do this, and some sources of income may work better for certain people.
One option is to continue working in a part-time capacity. This can help your retirement savings last longer and has the added benefit of keeping you socially connected. If you're aged 55 to 60, you can access some of your super while working part-time and continue contributing to it. You may also be able to reduce your working hours without reducing your income by starting a transition to retirement income stream (TRIS).
There are many part-time and casual jobs that can provide a flexible income source to suit your lifestyle. For example, you could become a tutor, sharing your knowledge and helping students with academic subjects or teaching a new skill like playing an instrument. Retirement villages often allow residents to teach classes in their activity halls, such as seniors' aerobics, model airplane making, cooking, or any other hobby you know enough about.
Another option is to turn your hobbies into a small business. Whether it's crafting, baking, or gardening, you can sell your products at local markets or online platforms like Etsy. You could also sell any vegetables you've grown or fertiliser from your household animals.
Freelance writing is another lucrative way to earn money part-time. You can write articles, blogs, or books on topics you're passionate about. Platforms like Upwork and Fiverr make it easy to find freelance writing gigs.
Finally, you can leverage your years of professional experience by becoming a consultant. Many businesses value the expertise and insights of retired professionals and will pay a handsome fee for your guidance.
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Freelance writing
If you have a way with words, freelance writing can be a great way to earn money in retirement. You can write articles, blogs, or books on topics that interest you. It's a flexible way to make an income, as you can work remotely and choose your own hours.
There are many platforms and job sites that can help you find freelance writing gigs, such as Upwork, Fiverr, and LinkedIn. These sites often have a variety of writing jobs available, from content marketing and copy writing to more creative writing roles. You can also find writing jobs advertised on freelance writing job boards, such as Premium Links, or by contacting Australian learning institutions and brands directly.
When applying for freelance writing jobs, it's important to showcase your writing skills and ability to meet deadlines. Many clients will also be looking for individuals who are self-motivated, reliable, and keen to learn and grow.
If you're interested in writing but don't want to go it alone, you could also consider joining a freelance team. These teams often offer support and guidance, and may be a good option if you're new to the freelance writing world.
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Consulting
If you have decades of experience in a particular industry, consulting can be a great way to make money in retirement. Many businesses value the expertise and insights of retired professionals, and consulting can provide a valuable source of income. Here are some tips to consider if you're thinking about consulting during retirement:
- Leverage your professional experience: Years of experience in your field can make you a valuable consultant. Identify your areas of expertise and consider how you can provide guidance and advice to businesses.
- Network and build connections: Attend industry events, join relevant online communities, and utilise your existing network to spread the word about your consulting services. Building relationships with potential clients is crucial for success.
- Determine your niche: Identify the specific area within your industry where your knowledge and skills are most valuable. Focus on a niche that is in high demand and where you can offer unique insights.
- Set your rates: Consider the market rates for consulting services in your industry and set your prices accordingly. Be flexible and open to negotiation, especially when starting.
- Market your services: Create a professional website, develop marketing collateral, and utilise online platforms to promote your consulting business. Highlight your experience, success stories, and the value you can bring to clients.
- Stay updated: Keep yourself informed about the latest trends and developments in your industry. This will ensure that your knowledge remains relevant and valuable to your clients.
Remember, consulting can be a flexible arrangement, allowing you to choose your projects and work hours. You can provide consulting services part-time or on a project-by-project basis, giving you control over your workload and work-life balance during retirement.
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Renting out a room
Before renting out a room, it is important to check in with tenancy and local authorities to ensure you are compliant with all applicable laws and regulations. Each state and territory in Australia has its own regulatory body for renting, and it is crucial to understand your rights and responsibilities as a property owner or landlord. You should also research rent prices in your area to ensure you are charging a fair and competitive rate.
When renting out a room, it is a good idea to establish clear house rules and expectations with your tenant or housemate. This includes deciding on a bond amount, rent payment dates and methods, and how bills, food expenses, cleaning duties, guests, pets, noise, parking, and moving-out terms will be handled. Keeping records of all transactions, receipts, and any other relevant documentation is essential to avoid payment disputes and for tax purposes.
It is also worth considering the type of insurance you may need when renting out a room. A standard homeowner's insurance policy typically does not cover damage or loss caused by tenants or housemates, so you may need to purchase landlord insurance to protect your property. Additionally, contents insurance can cover your belongings, but it is important to read the product disclosure statement carefully to understand what is covered and what is excluded.
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Dividends from publicly listed shares
It's important to understand how dividends are taxed. In Australia, dividends are paid out of profits that have already been taxed at the company level, currently at a rate of 30% for large companies and 25% for small companies. To avoid double taxation, shareholders receive a rebate for the tax paid by the company. This rebate is known as a franking credit or imputation credit. For example, if a company pays you a dividend of $1.75, you will also receive a 30% franking credit, resulting in a total taxable income of $2,500. You can then claim this franking credit as a tax refund, depending on your tax rate and other sources of income.
When a company pays a dividend, it must provide shareholders with a distribution statement. This statement includes details such as the amount of the dividend and the franking credit. Public companies must provide this statement on or before the day the dividend is paid, while private companies have up to four months after the end of the income year. The distribution statement is essential for completing your tax return accurately.
To find high-dividend-yielding stocks, you can use a dividend yield scan, which identifies the top publicly listed companies with the highest dividend yields. However, it's important to note that a high dividend yield can sometimes indicate a falling share price or limited growth prospects. Therefore, it's crucial to conduct thorough research before investing.
By investing in publicly listed shares and understanding the taxation process, you can generate a steady stream of income through dividends during your retirement. Remember to consider your risk tolerance and diversify your investments to balance potential returns with capital preservation.
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Frequently asked questions
There are several ways to make money in retirement in Australia, including:
- Downsizing your home or renting out a room
- Transitioning to retirement and accessing some of your super while working part-time
- Retraining or changing careers and working part-time
- Freelance writing
- Consulting, leveraging your years of professional experience
- Tutoring or teaching a class in a retirement village
If you get the Age Pension, you can earn up to \$300 per fortnight before it is reduced. If you are 60 or older, your super payments may be tax-free. However, every situation is different, and you should speak to a financial advisor for an official answer.
Aside from the options above, you can also:
- Become a celebrant, officiating weddings, funerals, and other significant life events
- Turn your hobbies into a small business, selling your products at local markets or online
- Babysit or run an after-school care program from home
