Use This Options Strategy as a ‘Side Hustle’ to Generate Stable Income in Retirement

In today’s uncertain markets, investors are not just chasing growth. They are chasing income they can count on.

In his video “7 Ways to Make Money with Your Investments (Beyond Dividends),” Rick Orford discusses how to build a diversified, income-producing portfolio using a mix of bonds, dividend stocks, and options strategies, as well as how to balance risk and reward for long-term success.

Bonds remain the backbone of most retirement portfolios, and with good reason.

When you buy a U.S. Treasury bond, you are lending money to the government and collecting interest (called coupon payments) along the way. The longer the term, the higher the yield, and today’s 10-year Treasury bonds (USTY10.RT) are paying between 4.1% and 4.5% annually, backed by the full trust and credit of the U.S. government.

The benefits are stability and predictability, while the drawbacks are limited upside and inflation risk.

That’s why many investors use a bond ladder strategy (buying bonds that mature at different times and rolling them over to maintain constant time exposure) to maintain cash flow while remaining flexible if rates change.

Track US Treasury rates and bond yields on Barchart Interest Rates Page →

Dividends are like the “base paycheck” for investors. You are paid only to own shares of companies that distribute a portion of their profits to shareholders.

Long-term investors typically focus on:

These names – think Coca-Cola (KO), Johnson & Johnson (JNJ) and Procter & Gamble (PG) – have survived wars, recessions and various interest rate cycles, while rewarding shareholders every quarter.

“Dividends are the base salary,” Rick explains. “They reward patience, discipline and consistency.”

You can find dividend opportunities at Barchart Best Dividend Stocks and ETFs Page →

If dividends are your paycheck, covered calls are your side hustle.

This popular options strategy allows investors to generate additional income from stocks they already own by selling call options. You collect a premium up front and, as long as the shares do not exceed their strike price, you keep both your shares and the premium.

In addition to covered calls, traders can use credit spreads (bullish options and bearish options) or iron condors to generate income with less capital.

• Covered calls: Ideal for investors who already maintain positions in stocks.

• Bull stall / bear call Extends: Defined risk games that work with smaller accounts.

• iron condors: Combine both spreads to create a “profit zone” in range-bound markets.

“Covered calls are income from what you already own,” says Rick. “Differentials and condors are advanced plays, perfect for maximizing every opportunity.”

• Covered call filter →

• Bear Call Propagation Analyzer →

• Bull Put Spread Screener →

The key is diversification across income types, not just the search for yield. A simple, long-lasting income portfolio could include:

• Treasurys or government bonds for security and stability

• Dividend Paying Stocks for Steady Growth

• Options Strategies to Increase Profitability and Flexibility

You don’t have to choose just one. As Rick explains, the most successful income investors rotate these strategies throughout the year, adjusting them based on interest rates, volatility, and market cycles.

“Understand the risks, weigh them against the rewards, and you can build a portfolio that will pay off for years to come,” says Rick.

As of the date of publication, Barchart Insights had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com