A simple Google search of “retirement statistics” can provide some daunting numbers. The information is vast, wide ranging and can vary from publication to publication. Different experts will give different statistics for pensions, 401(k)’s, savings, financial goals and retirement goals — and even the definition of an expert varies. It’s difficult to make sense of this vast information, and it can be harder still to make sense of it when you’re working in a niche field like real estate.
We’ve been gathering experts of our own — people who have worked in real estate for years and have found success saving for the future in an industry constantly trying to keep up with the present. And make no mistake, while retirement may seem like a long way off, planning for retirement starts in the present.
Yes, retirement may be the last thing on your mind when there’s so much uncertainty in the market, but that doesn’t mean that it shouldn’t be part of your life right now. According to a report published by CNBC in March 2018, on average, Americans between the ages of 55 and 64 have saved only 12 percent of the recommended amount needed for retirement.
However, there are simple things you can do to get yourself on the right path to a secure retirement. Our experts recommend three things you can do today that will set you up for success in the future: build your reserves, organize your money and acquire investments.
BUILD YOUR RESERVES
Most financial advisors will tell you that you need emergency reserves that can last you six months. So, if your monthly expenses are $2,000 per month, you should have $12,000 in savings. If you spend an average of $5,000 per month, you should have $30,000 in reserves. If you don’t have any savings built up, these numbers can be daunting, to say the least, so where can you start?
Kasey Stewart is the director of member development for the National Association of REALTORS®. For her, the answer is in starting small. “If you save $11 a day, after 90 days you’ll have saved $1,000, and that’s a good start.”
Stewart points out, though, that even diligent savings can disappear without a system of organization. Start by separating your business expenses from your personal expenses, which is one thing when your expenses and income are predictable. REALTORS®, however, work predominantly off commission, which can fluctuate widely and is dependent on the time of year, the economy and the market.
GET ORGANIZED
As a Wealth Management Advisor with First Midwest Financial Services, Benjamin Wozniak learned early on that organization is key. “What I set up is what I call a waterfall, a stair step approach,” he said. Rather than approaching savings with a fixed number like $11 per day, Wozniak devotes a percentage of his income to savings, which he then breaks down even further.
“All the money I get flows into a business checking account,” he said. “Then, I take a percent out and deposit it into a separate account for taxes, and I take a percent out and deposit that into a separate account for savings.”
Wozniak pointed out that sometimes we end up using a great deal of structure to afford and allocate money to our hobbies, where our business structure gets neglected. “I got successful and got into the restaurant business,” he said. “I noticed immediately that I was running my hobby like a business, and my business like a hobby.”
Wozniak then decided he needed to restructure his business, and that’s where his waterfall approach came into play. It’s worked for him, and now his hobby has become an investment that continues to pay him dividends. And he’s not the only one with this kind of approach.
“Every REALTOR® can establish themselves as an LLC,” Koki Adasi, a REALTOR® in Washington, D.C. who serves as a senior vice president at, said. After several years as a REALTOR®, Adasi decided to restructure his business to secure financial longevity. “I established my business as an LLC and I actually pay myself as an employee of my own company.”
BUILD INVESTMENTS
Adasi’s method for securing financial stability is to invest in properties that can bring in a steady flow of money, rather than rely solely on sales and commissions. “My investments have revolved around buying and rehabbing properties, and buying properties for long term investments and rentals I’ve held onto for years,” he said.
Adasi started by rehabbing properties and turning them around to make a profit. Along the way, however, he found that managing his properties was an easy way to keep money coming in on a regular basis. “My first purchase was $126,000 … we bought the house with tenants already in it. They were there for several years, and they paid late every month, but they paid their rent every single month,” he said. “The mortgage payment was $752, including taxes and insurance, and the rent was $1,400.”
Adasi ended up selling that property for a profit and used that profit to invest in other properties. But he
learned that buying, rehabbing and selling properties isn’t the only way he could use investments to work for him. Adasi’s investments now involve both rehabbing properties and managing properties to diversify his cash flow. Having his money work for him and toward his goals is part of Adasi’s financial plan.
“I think REALTORS® should invest more in real estate,” Adasi said. “I think real estate investments can be part of your retirement income.”
BRING IT ALL TOGETHER
“Everyone needs a financial plan,” Dory A. Rodriguez, wealth advisor with HighPoint Planning Partners, said. “Investing, in my mind, is a piece of that financial plan.” As a wealth advisor, Rodriguez helps her clients plan for the long term, and helps them bring these three elements together to make one cohesive picture: reserves, financial structure and investments. For her, financial planning is about making sure all your investments and sources of income are working towards the same goals.
“If you have a 401(k), a Roth IRA, a rollover IRA, maybe a joint account with a spouse, and if you look at all of those things together holistically, how are you allocated?” she said. “I find oftentimes people have various investment plans and there’s a different role for each of those investments, so maybe it’s time to take a look at those and make sure they all have the same directive.”
No matter where you are in your retirement savings, REALTORS® have the responsibility and the burden to plan for their retirement themselves. The days of working at the same company your whole career and living off the pension they provide you are over. Our experts agree: building your reserves, creating structure and organization for your finances, and acquiring long-term investments are fundamental in securing financial stability.