The Average Retirement Account Has Less Than $100k: Here’s How Real Estate Can Help

The Average Retirement Account Has Less Than $100k: Here’s How Real Estate Can Help

3 min read
Sterling White

Sterling White is a multifamily investor, specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling was involved with the management of over $10MM in capital, which is deployed across a $18.9MM real estate portfolio made up of multifamily apartments. Through the company he founded, Sonder Investment Group, he owns just under 400 units.

Experience
Sterling is a seasoned real estate investor, philanthropist, speaker, host, mentor, and former world record attemptee, who was born and raised in Indianapolis. He is the author of the renowned book From Zero to 400 Units and the host of a phenomenal podcast, which hit the No. 1 spot on The Real Estate Experience Podcast‘s list of best shows in the investing category.

Living and breathing real estate since 2009, Sterling currently owns multiple businesses related to real estate, including Sterling White Enterprises, Sonder Investment Group, and other investment partnerships. Throughout the span of a decade, he has contributed to helping others become successful in the real estate industry. In addition, he has been directly involved with both buying and selling over 100 single family homes.

Sterling’s primary specialities include sales, marketing, crowdfunding, buy and hold investing, investment properties, and many more.

He was featured on the BiggerPockets Podcast episode #308 and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single family investing and apartment investing to mindset and scaling a business online. He has been featured on multiple other podcasts, too.

When he isn’t immersed in the real world, Sterling likes reading motivational books, including Maverick Mindset by Doug Hall, As a Man Thinketh by James Allen, and Sell or Be Sold by Grant Cardone.

As a thrill-seeker with an evident fear of heights, he somehow managed to jump off of a 65-foot cliff into deep water without flinching. (Okay, maybe a little bit…) Sterling is also an avid kale-eating traveller, but nothing is more important to him than family. His unusual habit is bird-watching, which he discovered he truly enjoyed during an Ornithology class from his college days.

Education
Sterling attended the University of Indianapolis.

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What advantages and creative investment opportunities can real estate offer retirees?

The need to find great investments doesn’t stop once you hit retirement. In fact, it normally becomes more important. Finding interesting and profitable investments is a top priority, even among those retiring with a substantial nest egg.

The latest data from Fox Business and Bankrate.com suggests that more Americans are saving for retirement than they have in 6 years. In fact, only 5% of workers say they haven’t contributed to a retirement plan over the last 2 years. However, most are still far, far behind in how much they are saving.

Bankrate says 28% of Americans save at least 10% of their income for expenses and retirement. Yet less than 30% of them have enough savings to cover 6 months of expenses. Other recent statistics show that the average retirement account balance has been edging up close to $100,000. Of course, that won’t get most very far into retirement. The extremely frugal may make that last a few years, but many Americans should now expect to live 30 or more years after retirement age.

Related: Want to Retire Early? Sorry, But Much of Your Net Worth May Not Help

So whether out of a need to grow your nest egg and finances or from a position of building wealth and wanting a more interesting and profitable portfolio, how can real estate help?

Security

When it comes to investments, “interesting” doesn’t have to mean taking wild gambles. After all, you can go to Vegas and have a lot of fun with the hope of some big winnings. Real estate can be fun, offer the ability to flex your creative side, and still give financial security and sound investment choices. The great benefits include inflation protection, a tangible hard asset, and a performance often more reliable than stocks or bonds.

self-directed-retirement-account

Passive Income

The number one financial need in retirement is passive income. Period. It doesn’t matter how big your nest egg is. It can disappear fast unless you have a steady stream of cash coming in.Thankfully, real estate offers a number of ways to generate cash flow passively while keeping your capital intact.

Growth

For those who don’t have a big enough nest egg to generate the yields and cash flow they need to support their desired lifestyle, real estate is a perfect fit. It can deliver capital growth and income simultaneously. This can be achieved both by value add opportunities and appreciation.

Legacy

A few believe in depleting their retirement savings to the point where their last check bounces. After all, you can’t take it with you. Of course, timing that perfectly is easier said than done. Many also want to leave an inheritance or establish an ongoing legacy. Real estate offers many ways to do this. Choose from those investments that will keep on giving to individuals and causes you love for generations, or simply create a landmark that will be a fixture for decades.

retirement-income

Beyond the Basics

Becoming a DIY landlord or a weekend warrior fixing up and flipping houses is an option, especially if you are happy staying close to your properties and pitching in some manual labor. But there are more creative ways to invest profitably and create legacies, too. Consider using the three options below as alternatives to invest in real estate as a retiree.

Crowdfunding

Real estate crowdfunding has evolved to enable individual investors to profit from real estate right from the golf course, with just a few clicks. It allows you to find investments from organized sponsors, pick those that best fit your financial goals, and invest right from your phone or tablet. These are fully managed investments that put regular dividends back into your account on a regular basis, all without dealing with the hassles of hands on rehabbing or landlording.

Related: How to Use Real Estate to Retire MUCH More Comfortably Than Your 401K Would Allow

Turnkey Rental Properties

Turnkey rental homes streamline the process of becoming a landlord. A firm sources the assets, improves them, places tenants, and handles all of the daily accounting and property management. You buy them and add them to your portfolio. Then simply have your net rents transferred to you on a monthly or quarterly basis. 

Private Lending

Taking a page out of the banks’ playbook, more and more investors are engaging in private lending. This can be in the form of buying and trading existing mortgage notes or lending private capital directly to front line investors. You put up the money. Let someone else with more experience and time do the hard work, so you can receive attractive yields.

Are you using real estate to help fund your retirement? If so, how?

Let me know with a comment!