I’m looking for some feedback on my retirement plan. I’m 59 and hoping to retire in four years. My situation is a bit tricky:
I own a house valued at about $500K with a remaining mortgage of $160K
I manage six rental properties, each approximately worth $170K with balances around $53K
My 401K is limited (around $80K) because I focused on real estate investments
I currently earn near $100K a year, with my wife earning roughly half that
We expect combined pensions and Social Security to yield about $80K annually after taxes
We’ve nearly eliminated our debts and foresee having around $1500 a month to use either for mortgage payoffs or further investing. My plan is to contribute that amount into my 401K while financing a reliable used SUV.
When I retire, I plan on a lifestyle that includes traveling in an RV. I’ll allocate $1000 monthly from my 401K to cover a health insurance gap until age 65. After that, I should have about $2000 extra per month.
Would you change anything or suggest a more effective strategy? Should I pay off my rentals faster or consider selling some properties? Any advice would be appreciated!
Your retirement strategy looks solid overall, but there are a few areas you might want to consider adjusting. Given your substantial real estate portfolio, it might be wise to diversify your investments a bit more. Consider selling one or two of your rental properties and using the proceeds to boost your 401K or invest in a mix of stocks and bonds. This could provide more financial stability and reduce your property management responsibilities as you transition into retirement.
Regarding your mortgage payoff strategy, focus on eliminating high-interest debts first. If your rental property mortgages have higher rates than your primary residence, prioritize those. Otherwise, putting extra funds into your 401K might yield better long-term returns, especially if your employer offers matching contributions.
Lastly, ensure you’ve factored in all potential expenses for your RV lifestyle, including maintenance, fuel, and campsite fees. It’s often more costly than people initially estimate. Consider setting aside a buffer fund for unexpected expenses or emergencies that might arise during your travels. A consultation with a financial advisor could help fine-tune your strategy and ensure you’re on the right track for a comfortable retirement.
Have you thought about turning some of your properties into short-term rentals? It could boost your income and give you flexibility when you’re on the road. Plus, managing them remotely might be easier than long-term tenants. What’s your take on that idea?
hey ryan, sounds like u got a solid plan there! one thing tho, have u thought about sellin a couple rentals? that could give ya a nice chunk of change to boost ur 401k or pay off ur home. plus, less properties to manage in retirement means more time for that sweet rv life! just a thought from someone who’s been there. good luck!