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7 Sources of Retirement Income You Probably Haven't Considered Yet

There are some things you should do well before you retire, and an important one is this: Figure out your sources of retirement income. After all, Social Security isn't likely to be enough to support you. As of May 2023, the average monthly retirement benefit was just $1,836, or about $22,000 for the year.

To jump-start your thinking and planning about retirement income, here are the usual suspects -- and seven other sources that you probably haven't thought about.

Traditional sources of retirement income

Here are the usual suspects:

  • Social Security You can see the latest estimates of your future benefits by setting up and visiting your My Social Security account.
  • Pensions These are great, but few employers these days offer them.
  • Tax-advantaged retirement accounts These include IRAs and 401(k)s, which come in two main varieties: traditional and Roth.
  • Savings, brokerage, and other financial accounts These accounts might contain cash, certificates of deposit, stocks, bonds, and/or exchange-traded funds, among other things.

Other sources of retirement income

You could probably have thought of the income sources above on your own. Here, though, are seven sources that you might not have thought of. Some might serve you especially well, so dig deeper into any that intrigue you.

1. Dividend income

Many people ignore dividends, not realizing what powerful income producers they can be. Sure, if you have $3,000 in a stock with a 3% dividend yield, you can collect the princely sum of $90 each year, which isn't impressive.

But what if you had a $400,000 portfolio of stocks, many of which paid dividends, and the overall average yield on the portfolio was 3%? Then you'd be looking at $12,000 in annual income -- some $1,000 per month! Better still, healthy and growing dividend-paying companies tend to increase their payouts regularly, so you can expect your income to grow, perhaps even keeping up with inflation.

2. A job

You might have assumed that your retirement would be work-free, and it certainly might be. But if you don't mind doing a little work in your first few years of retirement, you can generate a lot of money. For example, working just 12 hours per week at $15 per hour will get you $180 per week (pretax), or more than $9,000 for the year.

It doesn't have to be terrible work, either. Think of the kinds of companies you might enjoy working at. Or think up work you can fashion for yourself, such as making and selling things online, giving music or language lessons, tutoring kids, or pet sitting. There are many possibilities.

3. Annuities

If you buy one or more annuities from sound financial companies, they can deliver dependable income for the rest of your life. (Consider favoring fixed annuities over variable or indexed ones -- they're more straightforward and less problematic.)

Below is an idea of the kind of income you might be able to buy via an annuity these days. You may find better offers by shopping around.



Monthly Income

Annual Income Equivalent

65-year-old man




65-year-old woman




70-year-old man




70-year-old woman





4. A reverse mortgage

A reverse mortgage involves receiving a lump sum or regular income from a lender via a loan, with your home as collateral. Once you're no longer living in your home, the lender gets it, unless you or your heirs pay off the loan.

Reverse mortgages won't work or even be attractive to everyone, but they can be excellent income producers for some people.

5. A health savings account (HSA)

Many of us are able to make use of health savings accounts, which do require you to have a high-deductible health insurance plan. You can fund them with pretax dollars, which can be used to pay for qualified healthcare-related expenses, such as medications, doctor visits, orthodontia, lab work, surgery, and much more.

How does this relate to retirement? Money in the account can be invested, and once you turn 65, it can be withdrawn and spent on anything. Like withdrawals from a traditional IRA, that income will be subject to income taxes, but you could well be in a lower tax bracket at that point. (And if you spend withdrawals on qualified healthcare expenses, it remains tax free.)

6. Downsizing

To keep more money in your pocket, you might move to a less costly home in your same region, saving money on mortgage payments, utilities, maintenance, taxes, insurance, and so on. Or you could move to a region where costs will be less, too.

7. Joining the rental economy

These days, almost anything can be rented, and you may have some valuable things to rent that could produce valuable income for you. For example, you might rent out space in your home, or your driveway, garage, swimming pool, car, boat, bicycle, camping equipment, garden, tools, or other things.

Whatever you do, be sure to have a solid retirement plan, detailing how much money you want to retire with, how you'll get there, and which income sources will support you.


This article was written by Selena Maranjian from The Motley Fool and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to

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