Strategies to Generate Additional Income in Retirement

Strategies to Generate Additional Income in Retirement

August 18, 2023

Unlocking additional income streams during retirement is not only about financial security but also about embracing newfound passions and experiences.

More than 1 in 4 retirees say they’re spending more than they can afford, according to an October 2022 survey by the Employee Benefit Research Institute. With inflation rates' unpredictability in 2023, it’s not surprising that savings aren’t going as far as they used to. But there are ways to bring in extra income without taking on a full-time job. 

In this blog, we will explore strategies to help wealthy retirees generate extra income while basking in the golden years. Let's explore what you need to know.

Invest Wisely

Investing is a key strategy for retirees seeking to generate additional income during their retirement years. With ample financial resources, retirees can explore various investment avenues, including stocks, real estate, and bonds, to maximize returns and create a steady stream of passive income.

According to, Americans had $6.8 trillion invested in 401(k)s and $12.5 trillion in IRAs in the first quarter of 2023. This number further Illustrates the importance of retirement savings and the potential for significant wealth generation through wise investment decisions. 

However, making sound investment choices during retirement requires careful consideration of individual circumstances and financial goals. This is where the guidance of a trusted financial advisor becomes invaluable. About 4 in 10 retirees use a personal financial advisor for retirement planning information and advice, which underlines the need for more retirees to seek help. A qualified advisor can assess a retiree's risk tolerance, income needs, and desired lifestyle to tailor an investment strategy that aligns with their retirement objectives. See here for further investment strategies.

Rental Properties

Investing in rental properties can be a lucrative strategy for retirees to generate additional income during their retirement years. Real estate offers unique advantages, such as a reliable source of rental income and the potential for long-term appreciation. Owning properties in desirable locations can provide consistent cash flow and potential for capital appreciation. 

In 2022, there was a notable shift in investment trends among Americans. The percentage of investments in target-date funds increased to 45%, while equity and balanced funds accounted for 55% of investments. This rise in popularity of target date funds also increased Real Estate Investment Trusts (REITs) ownership, leading to a growing number of Americans investing in REITs.

Moreover, real estate investments have the potential for capital appreciation over time. As property values increase, retirees can benefit from the growth in the market value of their properties. This appreciation can further bolster their wealth and provide a valuable asset to future generations.

Dividend-Paying Stocks

Investing in dividend-paying stocks can be an attractive option for retirees seeking a steady income stream. Dividend stocks are shares of companies that distribute a portion of their earnings back to shareholders in the form of regular dividends. These dividends can be reinvested to compound wealth over time or used to cover living expenses.

The allure of dividend stocks lies in their ability to provide a reliable income, especially when investing in companies with a history of stable and consistent dividend payouts. Companies with a track record of increasing dividends over time are often referred to as "dividend aristocrats" and can be particularly appealing to retirees looking for a dependable source of income.

Additionally, dividend-paying stocks offer the potential for capital growth. As the company's stock price appreciates over time, retirees can benefit from both the income generated by dividends and the potential increase in the value of their investments.

High Yield Bonds

High-yield bonds, also known as "junk bonds," are another income-generating option for retirees. These bonds typically offer higher interest rates than government or investment-grade corporate bonds, making them an attractive source of income for those seeking higher yields.

However, retirees must be mindful of the associated risks with high-yield bonds. Because companies that issue these bonds with lower credit ratings carry a higher default risk than investment-grade bonds. In other words, there is an increased chance that the issuing company may be unable to fulfill its debt obligations.

Retirees should work closely with a financial advisor to navigate the risks associated with high-yield bonds. A qualified advisor can help select suitable bonds that align with the retirees' financial goals and risk tolerance. Diversification is also key when investing in high-yield bonds to spread the risk across various issuers and industries.

Philanthropic Investments

Philanthropic investments offer retirees a unique and fulfilling opportunity to align their financial goals with social impact. Impact investing involves supporting companies and projects that aim to generate financial returns and strive to make a positive difference in society or the environment.

Through impact investing, retirees can direct their financial resources towards causes they are passionate about, such as education, healthcare, environmental conservation, and more. This approach allows them to make a meaningful contribution to the betterment of society while potentially earning additional income.

These investments can encompass various sectors, including renewable energy and social enterprises, to name a few. Engaging in philanthropic investments can foster a sense of purpose and fulfillment during retirement. For retirees who have achieved financial success, impact investing provides a meaningful way to leave a lasting legacy by contributing to the greater good and creating a positive impact for future generations.

Working with experienced financial advisors or impact investing professionals can help retirees identify reputable and impactful investment opportunities that align with their values and financial objectives.


If you are retired and need to fill a gap in your monthly income stream, save for other medium-to-long-term goals or supplement your existing investment mix, Certificates of Deposit (CDs)– including Discover’s CDs and tax-advantaged Individual Retirement Account (IRA) CDs — is one of the safest and easiest ways to make retirement income.

One CD strategy for generating cash flow is called a CD ladder. Open a series of CDs that mature at different times. When the first CD matures, harvest the interest income, but reinvest the principal in another CD at the top of your “ladder.” This approach can create a consistent and ongoing income stream to last throughout your retirement years. With Discover CDs, you always have convenient renewal options at maturity, making it easy to put this income-management practice into effect.

The downside is that interest rates are just above all-time lows, making it a not especially lucrative time for CD investors. That said, CDs are easy to buy, and CDs at FDIC-backed banks are practically completely safe.

Working With a Fiduciary Advisor

A Fiduciary Advisor provides invaluable guidance in determining investment objectives, creating personalized retirement plans, and offering ongoing portfolio management. When choosing an advisor to help see you through retirement, asking relevant questions about their experience and approach to retirement planning is a great first step. By doing so, you can find out if the advisor/firm aligns with your goals, needs, and beliefs.

At Agemy Financial Strategies, our team of Fiduciary Advisors is well-versed in comprehensive retirement planning services to help you reap a steady stream of income throughout your golden years. We are dedicated to helping clients navigate the intricacies of investment management during retirement to help ensure you never outlive your savings, so you and your family can gain peace of mind knowing that your retirement income plan is in capable hands.

In today's volatile economy, it’s not the easiest thing to generate income these days. But some legwork and a lot of planning ahead of time can help you find the best returns out there. 

Contact us today to take the first step towards a prosperous and rewarding retirement!