You May Not Be Ready For Retirement As Soon As You Think

 

Here's the thing, everyone wants to retire comfortably. Do you know exactly how much you'll need to retire and have the same lifestyle you have now? You may be surprised at what it will take, but today I'll show you one thing that can help you get there with a little more peace of mind. 

You’ve got $500,000 in liquid assets for your retirement, and you’re still 15 years away. All your bills are paid; you have a small mortgage on your home; cars are paid for and excellent credit. Don’t break your arm patting yourself on the back yet.31001231_s.jpg

People think more about what they’re going to do when they retire than whether they’ll have the funds to do them. Ask anyone who has retired; it takes more money than you thought it did. Let’s look at a hypothetical situation.

To retire with $125,000 income in today’s dollars with a life expectancy of 25 years after retirement, you’ll need to have a net worth of $1.5 million at retirement including what Social Security may provide. Your $500,000 will grow to $1,045,420 in 15 years which will leave you about a half million short. You’ll need to save $24,149 each year for the next 15 years to reach your goal.

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Is this surprising? Did you imagine that this example would be that far from its goal? It might seem staggering to save $24,000 each year, but there is another way…investing in rentals.

Real estate over the long term has proven to be a reliable, predictable investment.  Cash flows, appreciation, equity buildup and tax advantages are the components that contribute to the rate of return. Increasing rents, available financing, and strong appreciation make rentals particularly attractive in today’s environment.

While real estate investing is not for the faint of heart, it can help you transition into retirement a little easier.

Call me at 405.919.1098 to find out more about how rental homes can help you reach your retirement goals.