When planning for retirement, most people think of traditional options like 401(k)s, IRAs, and stocks. But relying solely on conventional income streams could leave gaps in your financial security.
So, what options are those planning for retirement taking to bridge the gap?
According to a 2022 analysis of Federal Reserve data by Boston College’s Center for Retirement Research, 10% of U.S. households with someone aged 65 or older earn rental income.
Statistics show that more and more Americans are investing in real estate as a retirement plan.
A Smart Retirement Decision
Think of real estate as the gift that keeps on giving. It’s like building a safety net that grows stronger over time.
Baby boomers figured this out decades ago and now they’re sitting on a whopping 42% of U.S. real estate wealth, worth around $19.03 trillion!
Investing in real estate can offer you unique benefits like:
- Predictable Income
- Long-term Appreciation
- Tax Advantages
- Generational Wealth
Plus, real estate investments give you a lot of flexibility.
You can be hands-on by managing a rental property or take a more passive approach by investing in REITs.
The first step is to learn about the options available so you can make more informed decisions.
5 Steps to Start Investing
- Set goals: Are you seeking steady income, long-term growth, or both?
- Educate yourself: Learn about real estate trends, property valuation, and financing options.
- Assess your finances: Review your credit score, savings, and debt-to-income ratio.
- Pick a strategy: There are many ways to invest in real estate, and finding the right fit for your goals is key.
- Just do it: Begin small and grow as you gain confidence. Consulting a financial advisor can help you meet your retirement goals.
Managing Expectations
Real estate investing for retirement income is not a get-rich-quick strategy. Properties require maintenance, tenants may come and go, and markets can fluctuate.
Be realistic about the time and resources needed to manage your investments.
A long-term perspective with a focus on steady income and gradual growth will help you avoid stress and align your investments with your retirement needs.
Baby boomers have shown us how strategic property investments can create lifelong financial stability.
Now, it’s your turn!
Remember: The first step is always the hardest, but it’s also the most important.
Keep an eye out for our next virtual Retirement Ready Challenge hosted by Kelton and Tresa Todd.
