While there were many unpleasant surprises for investors over the course of The Great Recession, those owning shares of target date mutual funds were stunned by the drops in their holdings.Things are looking better for real estate investing  Target date mutual funds are structured so that the investments finance retirement plans by altering the product mix as the date to quit working, once and for all, nears.  A far better way to fund retirement needs on a target date basis, however, is through real estate investing.

In a target date mutual fund, the investment mix becomes more conservative as the retirement date becomes closer.  Generally, that means selling stocks and shifting into Treasury bonds, municipal bonds, or blue chip corporate bonds as the day of retirement nears.  This can easily be accomplished through high yield real estate investing through a variety of property types, with far better returns and more security.

The most responsible way to accomplish this is through structuring the length of the term of the investment.  If investing in turnkey properties or small apartment buildings, pay off the mortgages so there is no note when the retirement date is reached.  Even better, pay off the mortgage long before retirement.  That is not difficult: making two payments a month rather than one will reduce the length of a mortgage by almost one-third.  There is no extra cost: simply cut the monthly mortgage payment into two.  It is best to set up an automatic withdrawal from a bank account so there are no postage charges.

If investing is private mortgages, loans from individuals or others to entities to purchase a property, only participate in deals with terms that comport with the retirement goals.  The investment income from a private mortgage note and/or the rental income from a turnkey property or small apartment building are both ideal for retirement funding.  During The Great Recessions as stocks and bonds plunged in value (along with target date mutual funds holding those securities), the level of rental income in the United States actually rose.  Historically, rental income rises about 5% every year.  From that, the amount of rental income received from a property will double in less than 15 years.

Passive investing with a long term approach is the best way to utilize real estate assets for retirement planning on a target date basis.  The long term approach puts time on the side of the investor: eventually, the mortgage will be paid off as the rental income continues to rise.  Investing with firms that have a proven track record allows for profitable returns to fund the retirement lifestyle desired by the individual.