The catalyst for this post is the following Tweet.
I have no idea whether it is factually correct but the idea that multiple streams of income is important certainly resonates with me and needing at least several in the context suggested makes intuitive sense. I first got interested in this idea in 2001 when I bought the book Multiple Streams Of Income by Robert Allen. I just stumbled into it in a bookstore and was intrigued by the title.
We've explored this countless times in the context of trying to add at least one other income stream in retirement beyond Social Security and portfolio withdrawals. Trying to add another income stream might become even more important in the next few years if threats of cuts to Social Security actually come to pass.
I think the threatened across the board 23% cut starting in 2034 is a low probability. It's more likely that the wealthy will pay more taxes and they will be subject to some sort of cut. The rub though is that "wealthy" will come much further down the income scale than many think.
It makes sense to plan on getting less than you're expecting, to plan for what can go wrong, not whistle past this graveyard. Here's a new way to implement a cut to SS that although not discussed anywhere that I have seen could be to eliminate the spousal benefit after some sort of means test. My wife doesn't have enough work credits to get her own Social Security. As it stands now, she can get up to 50% of my age 67 payout, a little less if she takes it earlier than 67. I'm theorizing that the 50% she would get won't happen. I will get my full amount with no cut and my full amount will still go to her if I die first. If a cut ends up being part of the solution, then cutting as I have described it would be simpler and cheaper then reducing everyone by some percentage.
Even if that doesn't happen, it helps create understanding of the numbers involved. I hope to wait until 70. Last I looked, my age 70 payout would have been $4100/mo and my wife would have maxed out at $1600 (1/2 my age 67 amount). That would be a 28% cut, pretty close to the 23% being kicked around. This really places an importance on finding other income streams.
So what are some income streams that we can pursue? Hopefully you'll comment with some thoughts?
Rental property. The numbers need to make sense. Where we live, currently the numbers don't make sense. Perhaps the bigger danger with this idea is being over leveraged. There were countless articles at the start of the pandemic of Airbnb owners with hundreds of properties that couldn't pay those mortgages while we were shut down.
Selling on Amazon. I've mentioned this before. I am not 100% on what this actually is. I know at least two people who do this but they don't really say much about it. Bro-Twitter is big on this too. I do know it is possible to end up with inventory you can't sell.
Monetize a hobby. I've been talking about this for 19 years. I have two buddies who make their own baseball cards and sell them, there's a fair bit of this out there actually. They are each about my age and while I do not know their thoughts about their retirement, based on Twitter engagement they make enough from this hobby for it to be a viable income stream. The idea list on this one is endless.
Teaching/coaching. Career coaching maybe, exercising, other form of life coaching? Some of these have certification processes but even then they might not be required for doing this. You need a genuine basis to believe you can help people but I think this can be a solution.
Consulting in the career you just left. This is something I see retired fire personnel do, often this requires being battalion chief or higher.
Part time service job in your community. This came up just last week. Fedex hired two ladies of retirement age who live up here to make last mile deliveries. Supposedly it pays $100/day. If Fedex brings the Walker deliveries to them then the $100 looks pretty good. If they have to go pick up the deliveries, that might add two hours to their day which makes the $100 less compelling but you get the idea.
Other work in your community. I will mention Mr. Backhoe as an example who for many years did backhoe work up here for many years as a retiree. I think he was up to $75/hour by the time he stopped, figure $50 net to him after fuel and maintaining the equipment. He had to turn down work there was so much. The list of these things up here for someone in their 60's and fit is endless. People post on our local Facebook page all the time about work they need done.
Airport shuttle. Take this as an example. Our town is two hours from a major airport so there is a shuttle service. We're taking it next month for a trip. All in, each full turn has to be at least 5-6 hours plus maybe an hour prepping the van for the day, so probably one round trip/day. Each trip can accommodate 10 people I believe. Figure 7 of the 10 tip an average of $8 you get maybe $100/day on top of what might be a $200/day salary per an internet search. No idea what the part time opportunities are but one or two days per week of this might work.
Writing. It's easier to find a way to do this thanks to the internet but you still need to have something to say and write real good like (humor).
Making art. Some segment of the population can do this.
Something technical. There's a Google certificate for cyber security that says it requires nothing advanced like knowing how to code. There's tons of this sort of thing where a reasonable investment of time can open a path to something like cyber security or web design and so on.
Entertainment industry. Really. My older sister has been doing this for years. She's probably been in every movie made in Boston over the last 20 years. She's met everyone which has been fun for her. In scenes where there are a lot of people, she's one of the people. She might have had a line, one time, but that's not really part of it. A couple of years ago, I was watching a Red Sox broadcast (Directv) and I saw her in a commercial for a window company.
Incident Management work. This is related to my fire gig but there are non-fire jobs available in the finance and planning sections doing what is essentially office work. The job with the lowest pay rate that I am aware of is in the communications unit as a radio operator (RADO) and doesn't require experience fighting fire. The hourly is $18.88 but pretty much the entire week is overtime. You earn your money to be sure, a full assignment is two weeks, 16 hour days which works out to $2700/wk or $5400 for a full two week roll. There is not a fitness requirement like pack testing but obviously you need to be able to remain mentally engaged for a series of long days.
This entire post has been a reiteration of the idea that there are endless possibilities for people to seek out. My list is probably quite limited compared to what's out there. For most people, all they need to solve this is just a little bit of innovative thinking, some sort of commitment to learning something new and the flexibility to try something new.
I don't know about adding five of these to your two of Social Security and portfolio withdrawals but adding two of them doesn't seem outlandish to me.
The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.
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