Today I’d like to talk about how to retire as a real estate agent. You see, one of the first “real-estate-sayings” I heard as a new agent was “If you list, you last.” Then I heard “Buyer’s are liars.” And finally, “Old Realtors don’t retire, they just get listless.”
Now buckle up. I may some things you disagree with and/or don’t like. And you do need to understand that I am NOT a certified financial planner, CPA or anything of the sort. I’m just a real estate agent like you that owns a piece of paper, a calculator and a pencil. The following thoughts are mine and are not to be taken as personal financial advice.
And now that my disclaimer is over…
As a real estate agent I’d like you to think of your retirement as a four-legged stool with good bracing. And as such, you’ll have four different income streams, well, five. That fifth is the good bracing that runs along and connects the other legs.
In this next series of posts for real estate agents that one day would like to retire from real estate, well, I hope you’ll find this series thought provoking.
The four legs of the stool are;
401K or IRA – Start building your retirement account early and, if at all possible, max it out each and every year.
Social Security – I’ve heard all the doomsayers say “Don’t count on it.” I’ve said it myself. My guess? It’ll be there even if it bankrupts our nation.
Rental House(s) – EVERY agent should have a minimum of one. I mean, jeez, this is what you do for a living, right? Take advantage of it.
Sell Your Business – By following models and developing systems you’ll move yourself from a real estate agent to a real estate business, even if it is inside a bigger (supervising) brokerage. This has value.
Sell (VERY) Part Time – This is the bracing that keeps the other four legs solid. Heck, do you really absolutely just want to sit on a porch and watch the surf come in?
Profit Share – This is an alternative bracing for real estate agents that are associated with a few of the firms out there that offer profit sharing, like Keller Williams’ plan that can be willed up to two generations.
In the coming posts we’ll did deeper here. I think this will be fun.
I had thought about every bullet point that you listed her in the past year. Keep me posted…
Thank you for reading and thank you for being a part of our office. You are setting a great example.
Awesome info Chris i totally agree with you.
Marcos, with all the time you have when you keep up what you are doing you are completely changing your family’s future.
Good stuff. A couple other thoughts.
1. There is always good old cash build up. With super low interest rates, set aside as much cash for a rainy day and retirement. Then you can draw on it. Banks can be very harsh without a good solid income stream.
2. Similar to the rental idea, buy a home in a desirable location to get the future appreciation. That way over the long term, you can have good equity buildup and can sell it later. You can then downsize and tap into the equity. No taxes up to 250 to 500K, depending on marital status. Buy a smaller house and use the cash as needed.
3. I suggest to my kids to invest in a Roth retirement. Never taxed at withdrawal and can pass to your kids.
Richard – Thank you for commenting. Items #1 and #2 will be covered in my next post regarding retirement for real estate agents. Both of those are a matter of good fiscal planning, as well. And yes, Roth is (usually) where it is at.
Personally, regarding #1, I use American Express Personal Savings. The interest rate is considerably higher than my physical banks.