What Is Passive Income? How Can You Easily Earn It During Retirement?

August 29, 2019
Chris Coulter

Article written by Chris Coulter

When you’re in your working years, you can with some predictability figure out how much money you take home in the form of a paycheque, how much money goes to paying bills and how much money goes into savings. Usually, your work income is adjusted for cost of living increases. You may get bonuses, commissions and other variable forms of income on top of your salary.

When you retire, your income becomes largely fixed. You may have Canada Pension Plan payments and Old Age Security. You may have an income that is derived from savings in the form of a Pension, RRSPs or savings that many can put into a lifetime annuity that will pay a prescribed and predictable amount every month to supplement your retirement income. An annuity gives you a guaranteed income stream for a period of time. It doesn’t pay a huge amount, but it does earn a little interest and it’s guaranteed to hold its value.

Passive income comes from money that you’ve made in the past and reinvested into investments or perhaps a business. Passive income is often referred to as money that you make “while you sleep.” It’s leveraging the cash or property that you have on-hand to make you additional money. This additional money can then supplement your retirement income.

Just because you’re no longer working doesn’t mean you cannot earn passive income. Technology has made that even easier. Here is a list of potential passive income opportunities that are available to retirees to supplement their fixed retirement income:

1. Buy a rental property

 If you’re in the position to afford it, having a rental real estate income can be a very lucrative investment. Taking in monthly rental income can supplement your income. Of course you’re still on the hook for ensuring the rental properties are occupied, rental income can cover mortgage costs, maintenance and taxes, as well as leave you with some additional money at the end of the month. If you really are looking at being disengaged from the day-to-day management, you can always hire a property management company to manage the properties and the tenants.


The nice bonus on top of this is you have a great real estate asset that likely has appreciated in value, and can be liquidated down the road to enhance the retirement pool.

2. Finance a mortgage

Borrowing from financial institutions is becoming more difficult, and many real estate investors and developers are looking to outside financing arrangements to fund projects. These funding opportunities usually pay a considerable amount more than traditional lenders. There is a huge market opportunity for private investment with second and third mortgages.

3. Finance a reverse mortgage

Reverse mortgages are going to be a popular option for seniors who are looking to liquidate their home to supplement their retirement income, but aren’t interested in moving. By investing in a reverse mortgage, you’re paying out the homeowner and allowing them to remain in their home. Over time, you take over the home as an asset that will likely appreciate in value.


Unlike traditional mortgages, the financing rates for the former owner are much higher and the equity within the home transfers to the financer much more quickly.

4. Rent a room, basement or your entire home

If you spend a considerable amount of time travelling, or at a vacation property during certain times of the year, your vacation home can be monetized through Airbnb.

Renting out your home or part of your home is much easier now thanks to the home-sharing service. Companies that run parallel to Airbnb will even manage the entire process for you. From fixing any deficiencies in the home, to providing a maid and concierge service, these companies enable you to leave those details to someone else.

5. Rent out your driveway

Parking in the city can get pretty costly. Parking lots in the GTA can run you $20-$30/day (or more).


If you’re in a high-demand area and not in need of your entire driveway or parking spot, you can use a company like Rover to match you with a suitable parking spot renter.

6. Start a Blog or Podcast

If you love to write or talk about meaningful things, and can attract an audience, you may be able to monetize your passion if you attract enough readership/listenership.

7. Digital Marketing

It’s easier than ever to monetize the sale of products or services online. If you have access to a suitable product, you could make a handsome amount online.

The digital age is making passive income easier to attain. Formerly, investments and business interest earnings were the primary go-to solutions for supplementing one’s retirement income.  Today, the opportunities to make passive income are only limited by your own imagination.