Last week I attended The Money Show in Orlando where I spoke
to many retirees who were seeking reliable sources of income.
As I walked across the exhibit floor, I was amazed to see
such a diverse number of companies – some considered dividend stalwarts and
others that had the aura of the “selling swampland in Florida” pitch. I went
from booth-to-booth and I was taken away by the fear that many retirees must
have as they seek out the most reliable sources of income.
While retirement is meant to suggest a happy time to enjoy
the "golden years" in life, the fear of losing money is oftentimes
the culprit that detracts from a quality lifestyle - retirement satisfaction
appears positively correlated with income, net worth, and health.
As the editor of The Forbes Real Estate Investor, I am
keenly focused on helping retirees reduce investment risk and sleep well at
night. In fact, I created the SWAN portfolio (SWAN stands for sleep well at
night) specifically to assist investors with building a nest egg that grows in
size.
REIT (real estate investment trust) income should be a part
of the retirement process and investors should take a closer look at the asset
class that offers an outsized dividend yield along with very predictable
sources of income.
However, REITs should not be painted by the same brush -
just because you are an investor in a REIT does not guarantee that the dividend
income will be sustainable. Most all retirees are counting on the income to
fund expenses or enjoy their quality of living, a dividend cut could mean be
devastating.
