February 5, 2023

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There’s a reason so many retirees tend to struggle financially — they don’t set themselves up with enough income streams for their senior years. Many seniors end up turning to Social Security to provide the bulk of their income (or, in some cases, all of their income). But those benefits generally won’t set the stage for a comfortable retirement when there’s no other income around to supplement them.
A cash-strapped lifestyle is something I desperately want to avoid in retirement. That’s why I’ve been prioritizing my nest egg for well over a decade, even though I’m nowhere close to retirement age.
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My logic is that I can’t rely too heavily on Social Security because benefit cuts are a distinct possibility and also because those benefits aren’t likely to replace a very big chunk of my income. And so my hope is that between my savings and investments, some Social Security income, and earnings from part-time work, which I hope to do, I’ll be able to avoid money troubles.
But while I do plan to set myself up with retirement investments that pay me on an ongoing basis — think dividend stocks and municipal bonds — I have no intention of investing in physical real estate for my retirement. Here’s why.
I know a few people who bought income properties in their 30s or 40s and used the rent payments they collected through the years to pay off their mortgages in time for retirement. Now, those people get to enjoy monthly rental income on top of their nest egg withdrawals and Social Security benefits, which makes for a nice amount of money to live on.
But the people I know who own and manage income properties also put in a lot of work. And that’s not something I’m interested in — not now, and not during retirement.
It’s not because I’m lazy, though. As I said earlier, I truly hope I’m able to keep working throughout retirement — not just for the money, but for the chance to do something meaningful with my time.
But I don’t find the work of a landlord meaningful. Rather, I find it a hassle. I don’t see myself enjoying the process of getting leases signed, following up on missing rent payments, and dealing with unexpected repairs. As such, owning an income property during retirement just isn’t something I’m considering at this point.
On top of not wanting to be a landlord, I also don’t want to bear the risk of income property ownership as a retiree. When you own another home, you could get stuck with hefty repair costs and property tax hikes. Those are bills I’m sure I won’t want to deal with at a time when I’m not working full-time (I barely want to deal with them now, while I’m still putting in 40 hours a week or more).
All told, owning an income property in retirement could be a great way to increase your personal cash flow. But if it’s not for you, there are other steps you can take to supplement your Social Security benefits. So you might as well explore options that are more appealing to you.

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