For many baby boomers, a side hustle in retirement can help supplement their income and cover unexpected expenses. It provides a meaningful way to stay engaged, utilize lifelong skills, and foster new connections.
As retirement lifestyles evolve, side hustles can offer both financial stability and personal fulfillment.
Supplement Retirement Income
The rising cost of living in the USA poses a significant challenge for retirees. Social Security benefits and personal savings often fall short of providing a comfortable lifestyle.
According to the Social Security Administration, the average monthly benefit for retired workers in 2024 is $1,907. This amount barely covers necessities in many parts of the country.
This financial gap can be filled by a side hustle which provides a consistent source of extra cash. This can help maintain the desired standard of living without depleting savings too quickly.
Combat Inflation
Inflation in the United States has been a pressing concern, with the Consumer Price Index rising 3.8% in 2024. Fixed retirement earnings may soon lose buying power due to the continuous rise in purchasing power.
By earning additional money through part-time work or freelancing, retirees can better pace with the rising costs. This extra income acts as a financial buffer. It helps maintain buying power and preserve long-term stability.
Stay Active and Engaged
Retirement does not have to mean inactivity. Engaging in a side hustle keeps baby boomers mentally sharp and physically active. In 2023, 11.2 million Americans aged 65 and older were employed or actively seeking work. This trend highlights the desire for continued engagement.
Side hustles offer opportunities to apply skills, learn ones, and stay connected to the workforce. This active involvement contributes to overall well-being, promoting mental and physical health in the golden years.
Additional Healthcare Costs
Healthcare expenses in retirement can be substantial and unpredictable. A retired individual in 2024 may need an average of $147,000 for medical expenses. A side hustle can provide a financial cushion, especially for healthcare needs.
This extra income can cover out-of-pocket expenses, prescription costs, or even long-term care insurance premiums. Having this dedicated fund for medical expenses offers peace of mind and better financial preparedness for health-related challenges.
Pursue Passion Projects
Retirement provides the opportunity to pursue long-standing passions and hobbies. Many baby boomers find joy in turning these passions into income-generating activities. Whether it is crafting, gardening, or writing, these pursuits can become profitable side hustles.
This approach provides financial benefits as well as brings a sense of fulfillment and purpose. Engaging in passion projects as side hustles allows retirees to monetize their skills and interests. It creates a rewarding blend of work and pleasure in their golden years.
Financial Security in Uncertain Times
Economic uncertainty is a reality that retirees must face. The inflation rate in the USA in 2024 is 2.9%, however, it was significantly higher in 2022 at 8%. Stock market volatility, global economic shifts, and unexpected personal financial emergencies can threaten retirement savings.
A side hustle provides additional income that works against market downturns or unexpected expenses. It allows retirees to leave their investments untouched during market dips, potentially preserving long-term wealth.
Build Social Connection
Loneliness and social isolation can be significant challenges in retirement. Engaging in a side hustle offers opportunities to meet new people and build social connections. The AARP reports that 35% of adults aged 45 and older experience loneliness.
A side job, whether it is part-time retail work or freelance consulting, provides regular social interactions. These connections combat feelings of isolation, contribute to mental well-being, and can lead to new friendships. The social aspect of a side hustle adds richness to retirement life beyond just financial benefits.
Pay Off Debt
Many Americans enter retirement carrying debt. In 2022, nearly 65% of individuals aged 65-74 had an average debt of $134,950. A side hustle provides extra income specifically for debt repayment. This focused approach can significantly reduce interest payments and accelerate the path to becoming debt-free.
Tackling debt in retirement through side hustle earnings frees up more of the regular retirement income for enjoyable activities. It also reduces financial stress, contributing to a more relaxed and secure retirement experience.
Fund Travel and Leisure Activities
Retirement is often seen as a time for travel and leisure, but these activities can strain a fixed income. A side hustle can create a dedicated fund for these enjoyable pursuits. On average, baby boomers spend around $6,700 annually on travel.
Extra income from a side gig can cover these costs without dipping into essential retirement savings. This approach allows retirees to enjoy their golden years to the fullest. They can experience new adventures and create lasting memories without financial guilt or stress.
Maintain a Sense of Identity
Retirement can sometimes lead to a loss of professional identity. A side hustle allows baby boomers to maintain a connection to their professional lives. This is because working in retirement is associated with higher levels of well-being.
It helps in preserving a sense of purpose and professional identity. This continued engagement can boost self-esteem. It can provide a sense of accomplishment and offer opportunities to mentor younger generations in their field of expertise.
Manage Rising Utility Costs
Utility costs, particularly for heating and cooling, can be a significant expense for retirees. The U.S. The Energy Information Administration reports an estimated increase in energy price by 2% in 2025. A side hustle can provide additional income to manage these rising costs.
This money can be used for energy-efficient home improvements or to cover higher monthly bills. Having a dedicated fund for utilities helps maintain a comfortable living environment without straining the regular retirement budget.
Prepare for Unexpected Family Expenses
Many retirees find themselves providing financial support to family members. A side hustle creates a financial buffer for these unexpected family expenses.
Whether it is helping adult children supporting grandchildren’s education, or assisting aging parents, this extra income provides flexibility to help family members. This can be done without compromising personal financial security. It allows retirees to be generous while maintaining their financial stability.
