REAL ESTATE
Real estate can also provide a steady income stream ahead of and even into retirement , even if you have no interest in managing a property yourself . There are a wide variety of ways to profit through real estate , from investing in real estate investment trusts to crowdfunding platforms to securing your own rental property .
A big advantage to real estate as a revenue stream in retirement is that it ’ s typically not correlated with the stock market . One of the major risks of investing is when your portfolio isn ’ t sufficiently diversified – when too many investments in your portfolio increase or decrease in value together . Having too much of your portfolio decline in retirement could be especially harmful , as most retirees have neither the time nor the revenue sources to recoup any losses . Because the income generated through real estate is not primarily correlated with stocks , it can be a helpful revenue source especially in a down market .
There are other advantages too . Not only do real estate assets typically appreciate over time , but as a landlord , you would benefit from having your renters pay off your mortgage for you . Eventually , renters could pay off the entire mortgage , leaving you with an additional retirement asset . Plus real estate properties come with their own set of tax benefits .
If you decide to manage a property yourself , though , be aware that this kind of “ passive income ” might not be passive enough for your lifestyle : Between identifying and evaluating renters , maintaining the property and collecting rent , renting out property might involve more of your time and energy than you ’ re willing to invest .
15 years
Having Multiple Paths to Generating Income in Retirement
Our ability to build a suitable nest egg and retire with confidence hinges on how well we can build our resources – and , ideally , from diverse funding sources . The old adage “ don ’ t put all your eggs in one basket ” is often cited with investing and asset allocation , but it also applies to how you fund retirement . Consider :
• Social Security can make up a significant portion of your monthly income in retirement … but it ’ s uncertain how long the program will last . According to the nonpartisan Committee for a Responsible Federal Budget , Social Security has been running at a deficit since 2010 – and barring additional funding , projects to be depleted within the next 15 years . 26 , 27 While legislation out of Washington could prevent that from happening , it might be prudent to adjust your plans now so you don ’ t have to rely on a full Social Security benefit .
• It ’ s one thing to plan on working in retirement when you ’ re still young – but will you still want to when you ’ re 70 ? Or , more to the point : Will you still be able to ? Results from the 2019 U . S . Census Bureau ’ s American Community Survey indicate that more than one-third of people age 65 and older reported having some type of disability . 24
A major component of retiring with confidence is making sure the funds you ’ ll rely on in retirement will be there when you need them . The best way to remove that uncertainty is to build up the funds under your control – contributions to an employer ’ s retirement plan ( especially when they offer a match ) and your own personal savings and investments .
According to the nonpartisan Committee for a Responsible Federal Budget , Social Security has been running at a deficit since 2010 – and barring additional funding , projects to be depleted within
26 , 27 the next 15 years .
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