Many retirees live on a fixed income, but retirement doesn’t mean you have to stop making money. It just means you don’t have to work as hard — or as much — to do it.
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Whether you’re looking to bolster your retirement savings, save for travel or have a bit extra to leave behind, passive income is the way to go. Here are some of the best passive income ideas if you plan to retire in five years, according to experts.
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CD Laddering
If you want to shore up your retirement savings without the high risk of stocks, certificates of deposit (CD) laddering is a passive income option.
“This is a strategy where you buy multiple certificates of deposit with different maturity dates,” said Erika Kullberg, an attorney and founder of Erika.com. “This lets you take advantage of the higher interest rates associated with longer-term CDs, while still having access to a portion of your cash as the shorter-term CDs mature.”
CD rate caps can be quite high, especially compared to traditional savings accounts. The national rate cap ranges from 5.75% APY (12-month CD) to 5.99% (1-month CD).
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Real Estate Crowdfunding
Another relatively low-risk option for soon-to-be retirees is real estate crowdfunding.
“Rather than acquiring and maintaining rental properties, retirees can invest in real estate through websites such as Fundrise or RealtyMogul,” said Ed Huang, side hustle and finance expert at SideHustles.
Through these sites, you can essentially invest a small amount of cash in a real estate portfolio. In return, you can receive rental income without having to manage the properties yourself.
Storage Unit Rental
If you don’t mind something more hands-on, you can always get into storage unit rentals.
“People with more time may want to explore starting their own self-storage facility in an in-demand area,” said Kullberg. “For more passive participation, you can even invest in a self-storage REIT!”
If you have an extra room on your property, you could also rent that out. The same goes for space in your garage or that empty toolshed you’ve got out back. As long as it’s safe and secure, you’re bound to find someone willing to spend a small sum to borrow your space.
Become a Consultant or Coach
Even if you’re currently working full-time, you might be able to spare a few hours a week building a consultancy or coaching business. Once you retire in a few years, you can always scale back or hire other people to run it for you.
And if you want to make it even more passive, you’ve got options.
“You can kickstart a side gig in consulting by creating online courses, e-books, or subscription-based opportunities that individuals pay to be a part of,” said Huang.
Become an Individual Lender
If you don’t have much time to dedicate to building a side gig, you could still earn passive income as an individual P2P lender.
“Peer-to-peer lending platforms allow you to choose and fund loans that provide interest income,” said Kullberg.
Note that peer-to-peer (P2P) lending comes with some level of risk. The person you lend money to might not make payments on time or they might try to avoid paying altogether. Choose a reputable platform and make sure to only lend what you’re willing to lose.
Rent Out Personal Items
Have you ever thought about renting out personal items — that is, things you already own?
If you have a spare room, you could become an Airbnb host. If you have a vehicle you’re not using, list it on a site like Turo. Even things like equipment or tools can be rented out on certain online platforms.
According to Huang, renting out personal items like these could net you a few extra hundred dollars a month. This can go toward your retirement travel fund or anything else you have in mind.
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This article originally appeared on GOBankingRates.com: 6 Best Passive Income Ideas If You’re Retiring in 5 Years
