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Can Real Estate Get You to Retirement?
The big question looming for all people is…Will I have enough money to retire in the style I want?
Financial independence and retiring early is the common reason MOST people begin investing in real estate, to solve the money equation in a way that supplements their JOB income. Other reasons are to minimize taxes, leave a legacy for your family, and make sure survivors are taken care of.
In reality, you need the right investment mix. The money part of retirement planning focuses on saving and growing the savings so that there will be enough money to live off when you stop working. There is both an art and science in figuring this all out.
The money part is only half the story, the other half is about planning your retirement activities so that you have a high-quality retirement life.
Retirement is a big deal, in part because of the emotional energy you invest in this transition. Like most people you have high expectations for what you’ll do with your extra time.
Are you asking – when can I cut back on working? Will my money last? What can I do to stay healthy? Another question is… Enough money for what?
Real estate can provide investment income and it’s a fact that your brain functions better and longer if you are involved in a business or learning something new…real estate can be just the activity to inspire you.
Any deep learning- courses, reading challenging material, writing and others – stimulate the brain. Some of the most effective intellectually challenging activities are learning a new language or musical instrument, traveling to new places, or managing / starting a new business.
The challenges of having all that time presents major issues in the domains of money, health and relationships. Inflation compounds the problem. To maintain your standard of living throughout your lifetime, your income needs to increase from year to year. If inflation is at a 3.5 percent rate, costs will nearly triple over a 30 year time frame. The second challenge is health and the third challenge has to do with relationships.
When retirement arrives, you reconfigure your investments to provide a retirement income.
What would you like your legacy to be? Are your estate planning documents and retirement plan beneficiaries set up to do what you want them to do?
Remember, while the financial component is critical to your contented retirement, it’s also about creating a meaningful quality of life!