How is that retirement planning coming along? I’ll show you how one investment property will help you achieve financial freedom. Yes, one not ten.
How much do you really need to retire. Let’s take a look: assume you will need retirement funds to last 25 years. At $6,000 per month with 2% annual inflation, you will need a total of 2.2 million dollars
Now let’s look at your RRSPs. If you contribute $24,000 per year or $2,000 per month for the next 25 years at 5% net return after inflation and fees, your portfolio will be valued at $1.12 million which leaves a shortfall of $1.08 million from the $2.2 million goal. Oh yeah, I don’t how many people have an extra $2,000 of after tax dollars to contribute monthly for the next 25 years.
As for Canada Pension Plan or Old age security. Don’t even think about it. Who knows where that will be with so many baby boomers retiring now. I am a firm believer in being in control of my own destiny and not relying on the government to help me out.
Having one paid off investment property more than covers the shortfall of $1.08 million. You can sell the property, you can keep the property and live off the cash flow. It presents you with options and peace of mind in the future.
When I first started investing in real estate I thought I needed ten investment properties, with time and experience I realized having two in Toronto will achieve that goal but now one investment property will do the trick. If you have two investment properties you would be way ahead. You can keep one for your retirement and the other split the proceeds for the kids university fund or downpayment on their first home or keep a portion for your retirement. Adding investment real estate to your portfolio creates generational wealth. It doesn’t have to be one or the other. You can invest in the stock market AND real estate.
If you are thinking of investing in real estate reach out. I’ve been at it since 2006.
Until next time….happy investing!!!!