What Role Do REITs Play in Your Retirement Savings Plans?
As we Baby Boomers move into our retirement years, for the first time ever a larger segment of our society will come to depend on retirement plans for their income. We will statistically also be living longer. Unlike our predecessors Baby Boom retirees will have to live on their retirement benefits for an additional 20, 30, or even more years!
* In the United States, the median life expectancy of a 65-year-old man and woman is 85 and 88, respectively. However, because the “median” represents the exact mid-point of the group’s age range, half of this population will live longer, often much longer, than the median life expectancy.
Boomer retirees could spend up to a third of their lifetime in retirement and this has caused some headaches for retirement planners. Retirement companies now more than ever must select investments that deliver a consistently high level of income to meet the needs of the baby boom retirees, and also generate portfolio growth to ensure that the needs of retirees are met three decades in the future! Oh, and don’t forget to offset the effects of inflation in the process, please.
As with so many of us who are looking around for sensible investment avenues they too are turning more towards real estate, including REITs, for solutions to their problems.
- * The requirement that REITs pass at least 90 percent of their taxable income through to shareholders in the form of dividends makes them a strong income generating investment.
- As stocks, REITs also provide the opportunity for capital appreciation. This combination of investment characteristics makes them effective in extending the lives of retirement portfolios.
See how I’m using a REIT to make sure I retire happier and wealthier
Go well till the next time