There are a number of reports and studies circulating on the internet and in the media about Americans’ lack of retirement planning. A survey conducted by LIMRA, a financial services trade association, showed that approximately 49 percent of Americans say they aren’t contributing to any retirement plan. While this trend isn’t exactly new, it’s still a concern considering that retiree health care costs have increased an average 6 percent a year since 2002, according to a study by Fidelity Investments. Additionally, according to a new Gallup survey, Americans’ expected retirement age has increased from 60 to 67 over the last decade and a half.
It’s clear that saving for retirement has become more important than ever, but many pre-retirees wrongly assume that when they reach 65, Medicare will be able to cover most of their health care expenses. Unfortunately, this just isn’t the case, and many Americans are forced to continue working past age 65.
Of those who are saving for retirement, the vast majority invest their money with banks, brokerage firms, mutual fund companies and insurance companies. The reality is that investing in real estate can give you a much greater return on investment (ROI) because it factors in a unique type of return: cash flow. Cash flow is an immediate return and adds significantly to a property’s overall ROI.