Turning Your Passion into a Paycheck: Your Hobbies and Post-Retirement Income

With lifespans increasing, many experts predict that it will become more and more common for retirees to launch post-retirement careers. In fact, according to the Social Security Administration, someone reaching age 65 today can statistically expect to live another 19 to 21.5 years, a third of those 65-year-olds can expect to reach age 90, and about 14% of them will outlive their 95th birthday.

It’s not surprising, then, that many currently approaching retirement are looking for more meaning and engagement out of life—for more years—than previous generations. Also, with rising costs soaking up more and more of their retirement savings, many seniors are looking for ways to augment their incomes in ways that also contribute to quality of life. For many, turning a beloved hobby into a source of retirement income is the perfect solution.

Doing that requires a bit of thought and planning, but the benefits can make it more than worthwhile, according to Chris Farrell, author of Purpose and a Paycheck: Finding Meaning, Money, and Happiness in the Second Half of Life. “You spend your life gaining a wealth of skills and knowledge,” Farrell says. “The notion that at some arbitrary age you’re going to walk away and never use that knowledge again is not attractive.”

The first important step is taking a careful look at your retirement budget. You’ll want to know what resources are available to you with your retirement savings, pensions, and other assets in order to make an informed decision about what kind of income you need to generate through your own efforts. If part-time work for an employer is part of your plan, you need to have some idea of the range of pay available for the kind of work you plan on doing. All these pieces need to come together in the right amounts to make your plan run smoothly.

Next, assess your skills, interests, and lifestyle needs. Have you always wanted to teach art classes? Does your passion for and training in music qualify you to offer private lessons? For retired engineers or statisticians, math and science tutoring could offer the chance to make extra money by helping kids learn—without the necessity of getting an education degree. But suppose you don’t think of yourself as a “people person”; instead, your love for books, art, or other collectibles could make you a prime candidate for a second career as an Amazon reseller or operating an Etsy store.

One final word of advice: pay attention to your tax situation. Will your post-retirement income, whether from monetizing your passion or working part-time for an employer, put you in an unnecessarily high tax bracket? If you’re receiving Social Security benefits, even part-time income could boost you into a category where you’ll pay federal income taxes on a larger percentage of your Social Security income. So, as part of your planning, you may want to meet with your tax or financial advisor to gain an accurate picture of how your “extra” retirement income will affect your overall situation.

Empyrion Wealth Management specializes in helping family stewards and thriving retirees make sound financial plans to support their most important priorities. If you are wondering how your retirement or wealth planning strategies stack up, click here to schedule a meeting for a complimentary “second opinion.”

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Empyrion Wealth Management (“Empyrion”) is an investment advisor registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940. Information pertaining to Empyrion’s advisory operations, services and fees is set forth in Empyrion’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Empyrion. The information contained in any third-party resource cited herein is not owned or controlled by Empyrion, and Empyrion does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Empyrion of the third party or any of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner or investment advisor.

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