If you’re a baby boomer retiring in the next five years, this is the time to maximize your income and savings. Thanks to catch-up contributions, you can sock away an additional $1,000 into your IRA or $7,500 to your 401(k) plan, so this is a great time to earn extra money and shore up your retirement savings.
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As a pre-retirement boomer, you’re probably not too keen on picking up a second job to generate extra income. That’s why passive income strategies can be a great idea. Here are some of the best options.
Check Out: I Made $10,000 Using One of Dave Ramsey’s Best Passive Income Ideas
Read Next: The New Retirement Problem Boomers Are Facing
Probably the top dog when it comes to passive income ideas for boomers is rental real estate.
It’s not 100% “passive,” as you’ll have to buy and maintain a property, find renters and process paperwork. But once you’ve got it all set up, a rental property business can be pretty hands-off. Every month you’ll receive a check that you can use to offset your mortgage, pay your bills or invest in other assets.
Find Out: 10 Best Places To Buy a Short-Term Rental Property To Earn Passive Income in 2025
Buying dividend stocks is one way to generate true passive income. Depending on the stocks you buy, you can earn 3%, 4%, 5% or even more on your money, in addition to any capital appreciation that the stocks can generate.
If you stick with the so-called “Dividend Aristocrats,” or companies that have not only paid but also raised their dividend for at least 25 consecutive years, you’ll tap into an income stream that is likely to increase every year as well.
Generally speaking, the dividends you receive from stocks are taxed at a special rate of just 20%, 15% or even 0%, depending on your income and tax-filing status. This makes dividend stocks more tax-efficient than bonds, with the added kicker of potential capital appreciation.
One of the reasons that many older workers are paid more is that they have a wealth of experience. As you approach retirement, it’s likely that you’re an expert in at least one field, if not numerous ones. This experience is valuable, and people are willing to pay for what you know.
If you can successfully convey your knowledge through an e-book or online course, you can generate passive income for the rest of your life. There will be some upfront work involved as you create your product, but once it’s finalized, it can remain online and generate passive revenue with almost no more work involved — although updating your work periodically and marketing it online can help boost sales.
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