How to create the right side hustle for your retirement

How to Create the Right Side Hustle for Your Retirement

A generation ago, retirement meant more time to work on your golf game. Today, many retirees want the extra income, social contact, and mental stimulation that comes from continuing to be part of the workforce. And why not, because we’re living longer, and healthier lives.

In January 2018, 13% of Australians aged 65 and over had chosen to remain part of the workforce, compared to just 8% in 2006. This shift is indicative of a broader trend: the traditional concept of retirement is evolving. Rather than settling into a life of complete leisure, many retirees are seeking new ways to stay active, engaged, and financially secure.

Continuing to work after retirement age doesn’t necessarily mean staying in the same job – although downsizing to part-time or flexible working is a choice not just for those who have reached retirement age, but for all those over-55 seeking a change of pace. The gig economy has opened up opportunities to make money out of a hobby or simply have fun pursuing another interest.

The idea of a 'third age' career is gaining popularity, offering a fresh chapter filled with new possibilities. This period is often characterised by a desire to explore passions, utilise skills acquired over a lifetime, and even give back to the community in meaningful ways.

Before you dive into your third age business, it’s important to consider your interests, skills, and how you want to spend your time. Whether it’s freelancing, consulting, crafting, or offering services locally, the right side hustle can bring both personal satisfaction and financial benefits.

Here’s some advice about getting started, along with practical steps and tips to help you create a successful and fulfilling side hustle in your retirement.

 

Benefits of Working in Retirement

Staying active and engaged during retirement offers a multitude of benefits that extend beyond just financial gain. Here are some key advantages:

1. Mental Stimulation: Continuing to work, even part-time or in a side hustle, can keep your mind sharp. Engaging in tasks that require problem-solving, creativity, and critical thinking helps maintain cognitive function. Many retirees find that the mental challenges associated with work help to keep their minds active and alert, reducing the risk of cognitive decline.

2. Social Interaction: Work provides opportunities for social contact, which is crucial for mental health and overall well-being. Many retirees enjoy the camaraderie that comes from interacting with colleagues, clients, and customers. This social engagement can help combat feelings of loneliness and isolation that some retirees experience.

3. Sense of Purpose: Having a side hustle can give you a renewed sense of purpose. Many retirees report feeling more fulfilled when they have goals to work towards and responsibilities to manage. This sense of purpose can enhance your overall life satisfaction and give you a reason to stay motivated and active.

4. Financial Benefits: Additional income from a side hustle can significantly improve your financial situation. It can provide a buffer against unexpected expenses, supplement your pension, and allow you to maintain or even improve your standard of living. The extra income can also be used for travel, hobbies, or investing in your grandchildren’s education.

5. Physical Health: Staying active and engaged in work can have positive effects on your physical health. Depending on the nature of your side hustle, it can keep you moving and reduce the risks associated with a sedentary lifestyle. Even if the work itself isn't physically demanding, the routine and structure it provides can encourage a more active lifestyle.

6. Learning and Growth: Engaging in a side hustle can be an opportunity to learn new skills and explore new interests. Whether it's mastering digital tools, learning how to market your products online, or discovering new crafts and trades, the learning process can be exciting and rewarding. Lifelong learning keeps your brain engaged and adds a new dimension to your retirement years.

7. Contribution to the Community: Many retirees find great satisfaction in giving back to their communities. A side hustle that involves volunteer work, mentorship, or community services can be particularly rewarding. It allows you to share your knowledge and experience while making a positive impact on the lives of others.

8. Flexibility and Freedom: Unlike traditional employment, a side hustle offers the flexibility to work on your terms. You can choose how much or how little you want to work, what projects to take on, and when to take breaks. This flexibility is especially valuable in retirement, allowing you to balance work with leisure and other personal commitments.

9. Adapting to Modern Trends: Embracing a side hustle helps retirees stay connected to modern trends and technologies. This can be particularly empowering, as it ensures you remain relevant and informed in a rapidly changing world. Understanding and using new technologies can also enhance your personal life, from staying in touch with family to managing daily tasks more efficiently.

10. Boosting Confidence and Self-Esteem: Successfully managing a side hustle can boost your confidence and self-esteem. Achieving goals, receiving positive feedback, and seeing tangible results from your efforts can be incredibly rewarding. This confidence can spill over into other areas of your life, enhancing your overall sense of well-being.

The benefits of working in retirement are numerous and multifaceted. Whether it's for financial security, mental stimulation, social interaction, or personal fulfilment, a side hustle can add significant value to your retirement years. By staying active and engaged, you can make the most of this exciting phase of life, ensuring it is as rewarding and enjoyable as possible.

 

Older Australians often have enough spare time and the financial resources to have a side hustle

 

Embracing the Gig Economy

The gig economy has revolutionised the way people work, offering flexible, short-term, and freelance opportunities that are particularly appealing to retirees. Embracing the gig economy can provide a seamless transition into a new phase of productive and fulfilling work life. Here’s a detailed look at how retirees can take advantage of the gig economy:

1. Understanding the Gig Economy

The gig economy encompasses a wide range of activities where individuals can work on a freelance or contract basis. This model allows workers to choose their projects and work schedules, providing flexibility that is perfect for retirees. The gig economy includes jobs such as ridesharing, delivery services, freelance writing, consulting, and various online platform-based roles.

2. Statistics on Older Australians in the Workforce

In recent years, there has been a noticeable increase in the number of older Australians participating in the workforce. According to the Australian Bureau of Statistics, the participation rate of people aged 65 and over has been steadily rising. This trend reflects the growing desire among retirees to remain active and engaged. Embracing the gig economy allows them to do just that, without the constraints of a traditional 9-to-5 job.

3. Examples of Gig Economy Jobs for Retirees

There are numerous gig economy jobs that are particularly suitable for retirees, offering flexibility and opportunities to leverage their skills and interests:

• Ridesharing and Delivery Services: Companies like Uber and Deliveroo provide opportunities for retirees to earn money using their vehicles. These jobs offer flexible hours and the ability to work as much or as little as desired.

• Freelance Work: Platforms like Upwork and Freelancer offer a variety of freelance jobs in fields such as writing, graphic design, consulting, and more. Retirees can choose projects that match their skills and interests.

• Task-Based Jobs: Airtasker is an excellent platform for those looking to complete odd jobs or small tasks in their local community. This can include anything from handyman services to administrative tasks.

• Professional Services: Retirees with professional backgrounds can offer consulting services or specialised expertise on platforms like Freelancer or even directly to businesses in their networks.

4. Transitioning into Gig Economy Roles

Transitioning into the gig economy may seem daunting, but with a few strategic steps, it can be a smooth process:

• Assess Your Skills and Interests: Start by identifying your skills and interests. Consider what you enjoyed most in your previous career and how you can leverage those skills in a freelance or gig capacity.

• Research Opportunities: Look into the different platforms and opportunities available in the gig economy. Read reviews, check requirements, and see which platforms align best with your skills and interests.

• Start Small: Begin with smaller projects or gigs to gain experience and build confidence. This will also help you understand the nuances of working in the gig economy.

• Seek Support and Training: Utilise resources like Be Connected and Google’s Digital Garage to enhance your digital skills. These platforms offer free training and support to help you navigate the digital landscape of the gig economy.

5. Benefits of the Gig Economy for Retirees

• Flexibility: One of the primary benefits of the gig economy is the flexibility it offers. Retirees can choose when, where, and how much they want to work.

• Variety: The gig economy offers a wide range of opportunities, allowing retirees to explore different roles and industries.

• Supplementary Income: Gig economy jobs provide a valuable source of supplementary income, helping to boost retirement savings and provide financial security.

• Staying Active and Engaged: Working in the gig economy keeps retirees mentally and physically active, contributing to overall health and well-being.

6. Challenges and Considerations

While the gig economy offers many benefits, there are also challenges to consider:

• Income Stability: Unlike traditional employment, gig economy jobs may not offer a steady income. It’s essential to plan and budget accordingly.

• Self-Management: Gig economy workers must manage their schedules, finances, and sometimes health benefits. This requires a level of self-discipline and organisation.

• Learning Curve: There may be a learning curve associated with using new technology and platforms. However, with resources and support available, this can be overcome.

In conclusion, the gig economy presents a wealth of opportunities for retirees looking to stay active, earn extra income, and continue contributing to society. By understanding the landscape, leveraging their skills, and embracing the flexibility it offers, retirees can find meaningful and rewarding work in this modern economic model.

 

It's likely that Australians over 50 will need to embrace the digital age if they want a side hustle

 

Joining an Online Platform

In today's digital age, joining an online platform can be a gateway to a variety of income-generating opportunities. These platforms connect individuals with potential clients or customers, making it easier to find work, sell products, or offer services. Here's a comprehensive guide on how retirees can join and thrive on online platforms:

1. Popular Online Platforms

There are several online platforms tailored to different types of work and services. Here are some of the most popular ones:

• Airtasker: Ideal for odd jobs and local tasks.

• Uber: Offers ridesharing services.

• Freelancer: Great for freelance professional services.

• Upwork: Another platform for a wide range of freelance jobs.

• SEEK: A job search platform with various opportunities.

• Etsy: Perfect for selling handmade and vintage items.

• eBay: A marketplace for selling almost anything.

• Amazon: Allows for selling products to a vast customer base.

• Uber Eats: Delivery service for food.

• Deliveroo: Another food delivery service.

2. Steps to Join an Online Platform

Joining an online platform is straightforward, but each platform has its unique requirements and processes. Here’s a step-by-step guide:

• Step 1: Choose the Right Platform

Determine which platform best suits your skills and interests. For example, if you have a talent for crafting, Etsy would be an excellent choice. If you prefer driving, consider Uber.

• Step 2: Sign Up

Visit the platform's website and sign up. Most platforms require basic information such as your name, email address, and sometimes a phone number. For example, you can sign up on Airtasker or Freelancer.

• Step 3: Create a Profile

Create a detailed profile highlighting your skills, experience, and what you have to offer. A well-crafted profile increases your chances of attracting clients or customers. Include a professional photo, a clear description of your services, and examples of your work if applicable.

• Step 4: Verification and Background Checks

Some platforms require identity verification and background checks to ensure trust and safety. For instance, ridesharing services like Uber and Deliveroo may require these checks.

• Step 5: Start Small

Begin with smaller tasks or projects to gain experience and build your reputation. This approach helps you understand how the platform works and allows you to adjust to this new way of working. For example, you might start with small tasks on Airtasker or Upwork.

3. Creating a Successful Profile

A strong profile is key to success on online platforms. Here are some tips:

• Professional Photo: Use a clear and professional photo.

• Detailed Description: Clearly describe your skills, experience, and what you offer.

• Portfolio: Include samples of your work if possible. This is especially important on platforms like Freelancer and Upwork.

• Reviews and Ratings: Encourage clients to leave positive reviews and ratings to build your credibility.

4. Tips for Success

To thrive on online platforms, consider the following tips:

• Learn Digital Skills: Enhance your digital literacy through free resources like Be Connected and Google’s Digital Garage. These platforms offer courses on various digital skills that can help you navigate and succeed in the online world.

• Set Realistic Goals: Start with achievable goals and gradually take on more complex projects.

• Network and Connect: Engage with other users on the platform, join relevant groups or forums, and seek advice from experienced users.

• Stay Updated: Keep your profile and skills updated to remain competitive and attractive to potential clients.

5. Success Stories

Many retirees have found success by joining online platforms. For instance, a retiree might use their previous professional skills to offer consulting services on Upwork, or they might turn a crafting hobby into a profitable business on Etsy. These success stories serve as inspiration and demonstrate the potential of leveraging online platforms in retirement.

Joining an online platform can open up a world of opportunities for retirees looking to stay active, engaged, and financially secure. By following these steps and tips, you can create a successful side hustle that fits your lifestyle and interests. Whether it's offering services, selling products, or completing tasks, the possibilities are vast in the gig economy.

 

Turning Hobbies into Profitable Gigs

Retirement is the perfect time to turn your passions into profit. With more free time on your hands, you can focus on hobbies that bring you joy and transform them into a source of income. Here's how you can turn your hobbies into profitable gigs:

1. Identify Marketable Hobbies

The first step is to identify hobbies that have the potential to generate income. Some popular and marketable hobbies include:

• Crafting: Creating handmade goods such as jewellery, pottery, or knitted items.

• Art: Painting, drawing, or sculpting.

• Gardening: Selling plants, produce, or garden designs.

• Cooking/Baking: Making and selling homemade foods, catering services, or cooking classes.

• Writing: Freelance writing, blogging, or self-publishing books.

• Photography: Selling prints, offering photography services, or teaching photography.

2. Research the Market

Before you dive into turning your hobby into a business, it's essential to research the market. Understanding your competition and potential customers will help you tailor your offerings. Here are some steps to conduct market research:

• Analyse Competitors: Look at similar products or services in your area or online. For example, if you plan to sell handmade crafts, check out platforms like Etsy to see what others are offering.

• Identify Target Customers: Determine who would be interested in your products or services. This can be based on demographics, interests, and purchasing behaviour.

• Assess Demand: Use tools like Google Trends or surveys to gauge interest in your hobby.

3. Create a Business Plan

Having a solid business plan is crucial for success. Your business plan should include:

• Goals and Objectives: Define what you want to achieve with your side hustle.

• Marketing Strategy: Outline how you plan to promote your business. This can include social media marketing, local advertising, or word-of-mouth.

• Budget: Estimate your costs for materials, marketing, and other expenses.

• Pricing Strategy: Decide how much to charge for your products or services based on your costs and market research.

4. Set Up an Online Presence

Creating an online presence is vital to reach a broader audience. Here are some platforms and tools to help you get started:

• Etsy: Ideal for selling handmade and vintage items. Create a shop on Etsy and start listing your products.

• eBay: A marketplace for selling a wide range of products. Open a store on eBay.

• Shopify: Build your online store with Shopify, which offers customizable templates and easy-to-use tools.

• Instagram and Facebook: Promote your products through social media platforms like Instagram and Facebook.

• Canva: Use Canva to create eye-catching marketing materials and social media posts.

• Etsy: Ideal for selling handmade and vintage items. Create a shop on Etsy and start listing your products.

5. Utilise Digital Courses and Workshops

If you're looking to expand your skills or offer educational content, consider creating digital courses or workshops. Platforms like Teachable and Udemy allow you to create and sell online courses. You can also offer live workshops through Zoom or other video conferencing tools.

6. Market Your Products Locally

In addition to online sales, you can market your products or services locally. Here are some ideas:

• Local Markets and Fairs: Participate in local craft fairs, farmers markets, or community events to sell your products in person.

• Local Advertising: Advertise your business in local newspapers, community bulletin boards, or through flyers.

• Word-of-Mouth: Encourage satisfied customers to spread the word about your business.

7. Success Stories

Many retirees have successfully turned their hobbies into profitable gigs. For example, a retiree who enjoys baking might start a small catering business or sell baked goods at local markets. Another retiree might turn their love for gardening into a landscaping service. These success stories highlight the potential of turning hobbies into income-generating ventures.

Turning your hobbies into profitable gigs is a fulfilling way to stay active and financially secure in retirement. By identifying marketable hobbies, conducting market research, creating a business plan, and setting up an online presence, you can transform your passions into a successful side hustle. Whether you sell products online, offer services locally, or create digital courses, the opportunities are endless for retirees looking to turn their hobbies into profit.

 

Setting Up Your Home Workspace

Creating an efficient and productive workspace at home is crucial for the success of your side hustle. Whether you're working on crafts, providing professional services, or running an online business, having a dedicated space can make a significant difference. Here’s how to set up your home workspace to optimise your productivity and comfort.

1. Choose the Right Location

Selecting the ideal location for your workspace is the first step. Consider the following factors:

• Quiet Environment: Choose a quiet area in your home where you can work without distractions. This is especially important if your work requires concentration, such as writing or designing.

• Natural Light: Opt for a space with plenty of natural light. Natural light boosts productivity and enhances your mood. Position your desk near a window if possible.

• Space Requirements: Ensure you have enough space to accommodate your work activities. If you’re crafting or working on larger projects, a spare room or a garage might be ideal.

2. Ergonomic Setup

An ergonomic setup is essential to avoid discomfort and potential health issues. Here are some tips:

• Desk and Chair: Invest in a good-quality desk and an ergonomic chair. Your chair should support your lower back, and your desk should be at a comfortable height to prevent strain on your wrists and shoulders.

• Monitor Position: If you use a computer, position your monitor at eye level to avoid neck strain. An adjustable monitor stand can help achieve the right height.

• Keyboard and Mouse: Use an ergonomic keyboard and mouse to reduce strain on your hands and wrists. Consider using a wrist rest for added comfort.

3. Organise Your Workspace

Keeping your workspace organised can significantly enhance your efficiency. Here are some tips to maintain an organised workspace:

• Storage Solutions: Use shelves, drawers, and cabinets to keep your supplies organised and easily accessible. Label containers and bins to find items quickly.

• Desk Accessories: Use desk organisers, trays, and file holders to keep your desk clutter-free. A clean desk promotes a clear mind.

• Cable Management: Use cable organisers to manage cords and cables, preventing them from becoming tangled and messy.

4. Personalise Your Space

Personalising your workspace can make it more inviting and inspiring. Here are some ideas:

• Decor: Add personal touches such as photos, artwork, or plants. These items can make your space feel more comfortable and motivating.

• Lighting: Use task lighting, such as desk lamps, to ensure you have adequate lighting for detailed work. Warm lighting can create a cozy atmosphere.

• Inspiration Board: Create an inspiration board with quotes, goals, and images that motivate you. This can serve as a visual reminder of your aspirations.

5. Utilise Technology

Incorporate technology to enhance your productivity and streamline your work processes. Here are some tech tools to consider:

• Computer and Software: Ensure your computer is up-to-date and equipped with the necessary software for your work. This might include design software, accounting tools, or communication platforms.

• High-Speed Internet: A reliable and fast internet connection is crucial, especially if your work involves online activities such as virtual meetings or e-commerce.

• Printer and Scanner: Having a printer and scanner at home can save time and effort, especially for tasks that require physical documents.

6. Health and Wellness

Taking care of your health and well-being while working from home is important. Here are some tips:

• Breaks and Movement: Take regular breaks to stretch and move around. Sitting for long periods can lead to health issues, so aim to stand up and move every hour.

• Hydration and Snacks: Keep water and healthy snacks nearby to stay hydrated and energised throughout the day.

• Air Quality: Ensure good air quality in your workspace by opening windows for fresh air or using an air purifier.

7. Examples of Successful Home Workspaces

Many retirees have successfully set up productive home workspaces. For instance, a retiree who turned their love for painting into a business might have a dedicated studio space with ample natural light and organised art supplies. Another example could be a retiree offering online consulting services, who has a professional office setup with ergonomic furniture and advanced tech tools.

 

Understanding Tax and Pension Benefits

Navigating the financial implications of working in retirement is crucial to ensure you maximise your earnings and stay compliant with regulations. Understanding how additional income affects your pension and what tax obligations you might face is key to successful financial planning. Here’s a detailed guide on understanding tax and pension benefits for retirees engaging in side hustles.

1. Pension Income Test

The Age Pension Income Test determines how much pension you receive based on your income. The test considers income from various sources, including employment, investments, and your side hustle. The good news is that the pension system in Australia is designed to support retirees who wish to continue working part-time or casually.

2. Work Bonus Scheme

The Work Bonus Scheme is an excellent incentive for pensioners who want to earn extra income. Here’s how it works:

• Income Exemption: The Work Bonus allows age pensioners to earn up to $300 per fortnight from work without it affecting their pension. This is on top of the ordinary income-free area.

• Accumulate Bonus: If you don’t use the full $300 allowance in a fortnight, it accumulates and can be used to offset future earnings.

For more detailed information, you can visit the Services Australia - Work Bonus page.

3. Tax Obligations

Understanding your tax obligations is essential to avoid surprises at tax time. Here’s what you need to know:

• Tax-Free Threshold: For individuals over 65, the tax-free threshold is higher. As of the latest tax year, retirees can earn up to $33,448 before paying any tax if they qualify for the Senior Australians and Pensioners Tax Offset (SAPTO). For more details, check the Australian Taxation Office - Seniors and pensioners tax offset.

• Declaring Income: All income from your side hustle must be declared, including cash payments. Keep accurate records of all earnings and expenses.

• Deductions: You can claim deductions for expenses related to your side hustle, such as equipment, supplies, and a portion of your home office costs. Ensure you maintain detailed records and receipts for these expenses.

4. Tracking Earnings and Expenses

Staying organised is crucial for managing your side hustle finances. Here are some tips:

• Use Accounting Software: Consider using accounting software like MYOB or Xero to track your income and expenses.

• Maintain Records: Keep all receipts and documentation for any expenses related to your business.

• Regular Reviews: Conduct regular reviews of your financials to ensure you are on track and meeting your obligations.

5. Financial Implications of Working in Retirement

Continuing to work in retirement can have several financial implications. It’s important to understand these to make informed decisions:

• Impact on Pension: As mentioned, your earnings can affect your pension payments. Utilise tools like the Income Test Calculator provided by Services Australia to estimate how your income affects your pension.

• Superannuation Contributions: If you continue to work, you and your employer may still need to make superannuation contributions. These contributions can help boost your retirement savings.

6. Know Your Rights

Retirees in Australia are protected by law from discrimination based on age. The Age Discrimination Act 2004 ensures that older workers are treated fairly in employment contexts. Here are your key rights:

• Non-Discrimination: Employers cannot refuse to hire or set different terms of employment based on age.

• Equal Opportunity: You have the right to equal opportunities in hiring, training, and promotions.

For more information, you can visit the Australian Human Rights Commission - Age Discrimination.

7. Financial Advice and Planning

Consider seeking professional financial advice to navigate the complexities of tax and pension benefits. A financial advisor can help you:

• Optimise Earnings: Ensure you maximise your income while minimising the impact on your pension.

• Tax Planning: Develop a strategy to manage your tax obligations effectively.

• Retirement Planning: Create a comprehensive plan that considers all aspects of your financial situation.

 

Conclusion

Creating the right side hustle for your retirement can bring numerous benefits, from financial gains to enhanced social connections and mental stimulation. By understanding the various aspects such as joining online platforms, turning hobbies into profitable gigs, setting up an efficient home workspace, and comprehending the tax and pension benefits, you can confidently embark on this rewarding journey.

If you’re looking for properties with the space you need for your new side hustle, whether it’s a home office, a workshop, or simply a quiet study, explore the extensive range of properties available on our Downsizing website. We offer a variety of options to suit your needs and help you find the perfect home to support your entrepreneurial endeavours.

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FAQs

What are some popular retirement side hustles?

Popular retirement side hustles include freelance consulting, teaching or tutoring, selling handmade crafts on platforms like Etsy, providing services on Airtasker, driving for Uber or Deliveroo, and turning hobbies into businesses, such as woodworking, gardening, or pet-sitting.

How can I start a side hustle as a retired entrepreneur?

Starting a side hustle as a retired entrepreneur involves identifying your skills and interests, researching the market, and choosing a suitable platform or method to offer your services or products. Consider joining online platforms like Upwork or Freelancer for freelance work, or creating an online store on Shopify. Additionally, setting up a dedicated workspace and understanding the legal and financial implications are crucial steps.

What tax benefits are available for senior entrepreneurs?

Senior entrepreneurs can benefit from several tax advantages, including the Work Bonus, which allows retirees to earn more without affecting their pension. The Australian Taxation Office (ATO) provides various deductions for business expenses and superannuation contributions, helping to reduce taxable income. Keeping accurate records of earnings and expenses is essential for maximizing these benefits.

How does the pension income test work for retirees with side hustles?

The pension income test assesses the income of retirees to determine their eligibility for the Age Pension. Under the Work Bonus, retirees can earn up to $300 a fortnight without it affecting their pension. Earnings above this threshold are added to the income test, potentially reducing the pension amount. Detailed information can be found on the Services Australia website, which explains how to report income and manage your pension.