Recently I was chatting with a friend over a cup of coffee. She is someone that I trust and I count on her personal input and advice. I noticed she was a bit somber and pre-occupied which was far from her usual bubbly personality. A few minutes into our conversation, she revealed that she has been very upset about the amount of social security benefits that she would be entitled to. I carried the weight of this conversation with me, I could hardly believe someone as thoughtful and analytical as her, had overlooked setting up a plan for her retirement.

Many of us are dreaming about an early retirement, but a few of us have a decent strategy or understanding of it. We fund our retirement plans and contribute to social security each paycheck, but what do these contributions translate to in dollar amounts for our retirement? The average Social Security retirement benefit in May 2022 was $1,668 a month. I don’t know anyone that can solely live on this amount in the Bay Area.

The concept of “don’t put all your eggs in one basket” applies to investments as well. The high cost of living, our desire to spend and do more during our retirement, and our increasing life expectancy are all indicators that we need a purposeful and calculated approach towards funding our retirement. Using all available tools to generate this income seems the best route to take.

Here are some of the major means of generating income during our retirement:

Social Security Benefit
401, IRA and other retirement accounts
Pension plan (rarely do companies offer this)
Stocks and mutual funds
Investment properties

I believe in spreading our eggs into all these baskets. Diversification is the name of the game when it comes to investment. I sincerely, encourage you to consider adding one or two rental properties into your portfolio.

Take a few minutes to watch this video to see why investing in rental properties has specific advantages over other plans.

Rental income a great vehicle for retirement