How to live off your investment portfolio after retirement.

Jan 12, 2022

When approaching retirement, it’s important to consider how you might financially support yourself once you stop working. There are many different strategies and methods you can use to ensure you stay in the green, however today we’ll just be talking about how you might feasibly live off the income from your investment properties. 

Disclaimer: No person should rely on the contents of this article without first obtaining advice from a qualified professional. This article is prepared based on general information only. It does not take into account individual financial objectives or needs and is not financial product advice.

Where To Start:

Retirement is not the end of the road, it’s the beginning of the highway. So when you retire, you might want to consider what options you have. Your timeframe, property value, remaining mortgage and personal goals and needs will all factor into how you decide to use your investment property in retirement. Some of the ways to live off investment properties are:

1) Rental Income:

This is where you will continue to retain ownership of the physical assets and generate an income by renting out your property. These properties can be rented out for residential or commercial purposes, or as vacation homes. There are also often significant tax benefits that come with owning a rental property. In this way, you can continue to receive income despite not working. 

2) Capital Appreciation:

If you have owned the property for some time or made significant home improvements, it is likely the property will have appreciated in value. Instead of renting out the property and living off the rental income, you may decide to sell the property, giving you access to built-up equity. You may decide to live off the total sum, reinvest in shares, downsize into a smaller property, or boost your superannuation.

Where to Next?

Given the large number of factors including, property value, return on investment, timeframe and how you choose to live off your investment, there is no one size fits all approach when it comes to incorporating an investment property into your financial plan.

Investment properties can be a great addition for your retirement plan and have the potential to provide an income throughout your retirement. Even if you’re not planning to retire any time soon, it’s still important to consider what you may like to do later on. We recommend speaking with a financial planner who can help ensure your investment selection is suitable for you and your goals.