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Updated almost 8 years ago on . Most recent reply presented by

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Brianna H.
  • Investor
  • Katy, TX
24
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112
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Benefits of 401(k) over Property?

Brianna H.
  • Investor
  • Katy, TX
Posted

My husband's and my goal is to eventually use rental income as our retirement income. We currently have one rental home and are looking to have ~10 within the next 20 years. 

So the question is...what is the benefit of putting our money in a 401(k) over saving money for our next rental home? Obviously the 401(k) is sheltered from taxes until we are 59 1/2 (30 more years), but are there other benefits that I am not taking into account? 

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Christopher Phillips
  • Real Estate Agent
  • Garden City, NY
1,999
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Christopher Phillips
  • Real Estate Agent
  • Garden City, NY
Replied

@Brianna H.

Long term average growth for the stock market is 9% per year. This also doesn't include the company matching that you might have. It's put in pretax, deferring tax until you retire and will be at a lower tax bracket. Because the money is pretax, you can set it at a level to maximize your company matching but not notice much of an impact in your take home...

If you're going to invest long term, you should always consider having multiple streams of retirement income.

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