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With the cost of living increasing exponentially and market volatility becoming a regular occurrence, it isn’t easy to see a silver lining for investments, especially retirement savings. While we shouldn’t panic too much as long-term investing is designed to smooth the ups and downs in the market and focuses on long-term growth, we can’t help but be concerned about whether our retirement income will be enough, especially after the fact that many professionals nearing retirement have recently lost a substantial portion of their savings due to the bond debacle in the UK, and will have to work longer or lower their retirement standard.

Property investment is an excellent way for investors to supplement retirement income through passive rental income. 

What is Passive Income?

Passive income is regular income derived from a source where the person is not actively involved or need not do anything to receive an income, e.g. rental income or income from interest or dividends.

Advantages of an Investment Property

Investing in real estate to build wealth/gain assets – When you buy a property, it is considered an investment as it usually gains value over time.

Passive income at retirement could supplement your income and change your lifestyle – the extra rental income could fill any gaps that your retirement savings or pensions may have. You can also possibly live the lifestyle you envisaged for your golden years.

Generate passive income through rentals – Renting out your investment real estate could provide you with a steady cash income to help fund your retirement, especially if your pensions have not performed well or came up short according to your goals.

Pays for itself – rent pays the mortgage – The income from a rental property could potentially cover the cost of the mortgage, so it pays for itself. And once the mortgage is paid, the income could be used for savings or to fund your retirement.

Tax efficiency – There could be tax advantages to owning investment properties. An international tax consultant could help with tax jurisdictions and cross-border taxation and find the most tax-efficient way to add international properties to your portfolio.

How will Investment Properties make a difference to your Money at Retirement?

Can help upgrade your lifestyle – Rental income could potentially offer more income and allow you to increase your retirement lifestyle, e.g. Travel more, dine out more often, take up expensive hobbies or even not have to work part-time.

Give you financial security at retirement – The extra income could take away the financial stress of retirement and even give you financial security in case of emergency or unforeseen expenses.

Can sell properties and use the funds to invest for income – Selling your investment properties at retirement could help increase your retirement capital.

Rental income supplements retirement income – If you choose to keep your investment properties and rent them out, the rental income could supplement your lifestyle. You could use the money for luxuries or savings or even cover any income gaps.

Before investing in any real estate, it is advisable to consult with a financial advisor to determine if investing in property fits into your financial goals and your overall wealth-building plans. 

Please note, the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.