Boost Retirement Savings & Income w/ Investment Properties

Boost retirement savings and income with investment properties

Retirement is a time for you to enjoy your golden years, but without enough savings in your accounts, you might struggle to maintain the lifestyle you want. A survey of 1,000 members of the workforce by the Employee Benefit Research Institute found 55 percent are somewhat or very confident about maintaining a comfortable life post-work. While the number of workers feeling financially secure has increased to the point that now majority of workers have a positive outlook about retirement, a big chunk of employees also said they had no savings or investments to fund their lifestyle after leaving the workforce. With workers lacking confidence in funding their retirement, they should consider whether adding real estate assets to their investment portfolios may solve their retirement savings problems.

A little more than 1 in 3 workers who reported retirement savings said these balances are worth $25,000 or less. Since these amounts may not be enough, seniors are at risk for outliving their retirement saving. They also may not be able to depend on Social Security payments to live as they imagined after exiting the workforce for good because there are doubts as to Social Security’s staying power.

Only having a certain amount in retirement savings may not adequately cushion the blow of unexpected medical costs or the expense of fixing their home after a disaster. With the uncertainty that comes with retirement, retirees might be more comfortable knowing that they have a reliable stream of income coming in. Although retirees might have investments in the stock market or bonds, these sources of income may be more volatile than other markets, which may be why many seniors are turning to the real estate market to bring in more income during retirement.

Why invest in real estate before retirement 

Mike McDonald, who retired in 2013, told Yahoo Finance he helped increase his retirement savings by selling investment properties in the Southeast, which helped build his nest egg of $250,000 in savings. He said his investment strategy going into retirement was having money come from different sources.

Real estate can be a great channel for income if investors partner with the right real estate investment firm that specializes in areas of the country poised for growth. Investors thinking about purchasing investment properties should consider the extra cash they could have in their pockets each month from rental homes. Not only do investors benefit in knowing these properties will appreciate throughout the long term, but they also know they have cash flow from these homes in the short term.

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