Are you and your finances in good enough shape to survive 30 years of retirement?
We’re living longer than we used to. For most, this means many more years in retirement. What does that mean for personal finances? How can real estate help more individuals weather the decades ahead?
Long Life, Short Finances
In his recent book ‘Money,’ Tony Robbins reminds us that the data now suggests the odds are very high that at least one out of every couple of people will live well into their 90s, and perhaps beyond 97 years old. The age to collect Social Security or other retirement funds keeps being pushed back as well. In fact, by the time most of us hit 70, life expectancy could well be beyond 100 years old, and access to retirement funds (without penalties) could be pushed back another decade. That is if Social Security still exists.
Robbins also reminds us that pensions and Social Security are very new inventions. Inventions that were created when the average life expectancy was just over 60 years old, and with a system that rarely planned to pay out.
The biggest challenge for many is that they are one day going to wake up and realize that they current system, investment advice and calculators, and many popular tools, as well as mentality are simply not designed for living so long, especially without earned income.
In the past you may have worked 40 years to prepare for a ‘long’ 10 year retirement. Today many are looking at working 30 years, and yet need to provide for 30 or more years in retirement. That math isn’t going to add up for most people. That is unless you are saving at least 50% of your income, and have it invested in strong, well protected, income producing vehicles which are staying well ahead of inflation each year.
Many also need to listen to the buzzer going off; the wake up call to the fact that planning to work until 70 or longer isn’t going to be a reality. If you are doing something you love, and can keep doing it; that’s great. Yet, a recent Fox News report reveals data that shows 93% of those that have retired early didn’t have the finances to afford it. They either physically couldn’t work any longer, or they couldn’t get work or maintain employment (often due to age).
So how can we better prepare ourselves and our finances so that we can enjoy better retirement years and not go broke decades too early?
Quality of Life & Longevity
Another of the biggest challenges out there, and why a lot of smart capital is chasing anti-aging solutions is that living longer doesn’t necessarily mean living well. There are both physical and monetary challenges of living long. You don’t want to spend decades in physical and financial agony.
Getting serious about preventative medicine is smart. That means regular checkups and taking care of yourself. It may not sound fun, but when you are still surprisingly alive well beyond 70 you’ll be very glad for being in better shape.
Regular exercise and brain boosting activities are vital for avoiding health complication and degenerative diseases. This doesn’t have to be hard or boring either. Enjoy walks, swimming, casual sports, and trying out new things. This all adds up to enjoying life more now, and enhancing the ability to generate income.
Financial Health & Strength
How do you achieve more freedom sooner, and more financial security for later?
Even if you start stashing away 10% of your annual income now, and are able to amass $2 million in retirement savings by the time you are 70 that isn’t likely to cut it. If you began digging into that money; it would give you less than $67,000 a year to live on going forward. That isn’t going to go a fraction as far as it does today thanks to inflation. That especially isn’t going to go far for the many who will end up needing to pay for housing, food, and healthcare in retirement. Forget about gifts for the grandchildren, exotic travel, or playing golf.
This means a desperate need for passive income and stronger returns.
Real estate investment can deliver on that.
4 Ways to Use Real Estate Investment for Financial Success
- Generate Lump Sum Financial Gains
Wholesaling and flipping houses is an excellent way to generate large lump sums of cash quickly in order to bulk up finances early, or to catch up on lost time.
- Passive Income
Buy and hold rental real estate or owning a real estate business can produce regular, ongoing, passive income for now and later. That means more free time now, and automatic income later when you aren’t working.
- Leverage
Leverage is a powerful tool available to real estate investors. Financial leverage means the ability to generate massive cash on cash returns compared to other investments. Turnkey investment opportunities simultaneously offer financial leverage and the ability to leverage other people.
- Tax Benefits
Investing in real estate through a retirement account means being able to grow your nest egg tax deferred or tax free, and compounding gains for far superior results over time.
