What retirement vehicles do you have available to you as a real estate agent and what kind of wealth do you want to build? To be sure, this post isn’t for part time real estate agents. No, this is for those that are (or would be) full time real estate agents and who one day want to be able to live their “Life worth living.” So let’s discuss Real Estate Agent Retirement.

“Old real estate agents never retire. They just grow listless.“

– Unknown

Income Now

Obviously, as a productive agent you can create a good income. Yet, we also know that you will have to learn how to live on less than you earn. That’s easier to do once you’ve been able to get your income to cover your basic necessities. And by “necessities” I do not mean the lake house, pontoon and European vacation every summer.

As you build your income through sales and leasing I recommend you do not increase your lifestyle until the income is proven. In other words, it is my advice that your lifestyle trail your income by at least 12 months. This is certainly open to debate and criticism but I’ve never been too wrong by being conservative here.

Traditional or Roth IRA

I’m a big fan of the Roth IRA. You save money now, after tax, and it grows through the years and when you need it when you are older you get to withdraw… tax free! There are people for whom a Traditional would make more sense. Either is a great place to step your way into funding your retirement as a real estate agent.

Health Savings Account (HSA)

I blew this one for years before I wised up. There are a lot of strategies in which to utilize a HSA that I was unaware of. I was like “I’ll just pay my medical bills through this.” and that wasn’t necessarily the smartest thing I could have been doing.

SEP, Solo 401(k), etc

Look. I’m not an investment counselor outside of how real estate can help you. I can tell you that as a property manager I have employees and employees allow me to set up a 401(k) for everyone in which I too get to benefit from. It’s great. I max out this account every year and it has a significantly higher max than “regular” IRAs and with no income limitations!

So for the best advice here, talk to your CPA or investment counselor on how best to utilize these types of accounts and what is best for you.

Rental Property

You were wondering when I’d get here, right? Yes! You get to see the market ahead of everyone else. Why would you not want to own an income property, or two, or three? We will talk more about these as we move forward and yet I’m simply amazed at how many real estate agents don’t own more than their primary residence.

Equity In Your Own Brokerage

What would it take for your current broker to cut you in? 5%? 10% More? What is the harm in asking what the terms would be? Then you could sit down and see if it makes sense for you to invest in an established business you already understand.

If your current brokerage, that you helped to build (assuming you are a great agent with good volume and reputation) doesn’t want to cut you in, is it worth it to go open your own house selling or leasing shop? Would it be worth the risk? How about the work load? Would you really want to? Sure, these are questions you would have to very seriously explore before being rash and yet it could be a very lucrative way in which to help fund your retirement.

Income Later

Look, one of the great things about being an established real estate agent is that you’ll have a very lucrative book of business at the end. Well, if you’ve done it right. Maybe you decide to sell four or six or eight houses a year to people you really enjoy working with. That money coming in cant hurt, right? And for all the other business, or in lieu of selling the four, six or eight you could be staying in touch with your database and referring them to just the right agent. They get great, hand-picked service and you earn a negotiated referral fee to help fund your life. Sign me up. Referral fees are one of the highest dollars-per-hour activities a real estate agent can partake in. Take advantage of it.

Or, perhaps, you sell your book of business. One lump sum? Referral fees? A mix? We can talk more about this later.

Ask yourself, “When is the last time I went to a real estate agent retirement party?”

The answer may scare you.

People, what if you had just three of these incomes to go along with your social security and whatever else your spouse/significant other has to offer? What would your retirement look like then? Could you retire earlier?

Do you want to get started today? Reach out to me. I’m here to help.