Retirement is a critical point in the financial history of every American, and oftentimes one of the most anxiety ridden for most individuals. Although retirement is inevitable, many individuals fail to adequately plan for this period in their life. Improper planning adds to the financial stress that individuals face, as they are no longer able to work and must rely on either Social Security or current savings and assets to sustain their standard of living. Fortunately, there are a variety of options for investment and cash flow for both new and continuing retirees that serve as viable options in this regard.

One of the cheapest and most effective ways of establishing cash flow is to use existing real estate property for that purpose. It may be possible to leverage currently held real estate into current cash flow by renting it out to local businesses for purposes, or by turning any other real estate holdings into rental property. When properly managed, rental properly allows for a secure flow of income that gives retirees a certain amount of stability in terms of cash flow. However, there are disadvantages to holding investment real estate property, as it can have hidden costs and fees that depend on the individual situation of the retiree.

If there is available equity within the main property held by retirees, it is possible to leverage this income into investment properties depending on the housing market in the area. Due to the recent financial crisis, real estate and rental properties have been incredibly low, and it is possible to acquire assets that will significantly rise in value in the near to medium term. Careful investment within this sector can lead to profits and a reliable income stream, but the variances within the market and the current state of the economy makes this investment option one for individuals who can afford a certain degree of risk within their portfolio.

For other retirees, it may be possible to retire with a significantly lower tax load depending on the source and level of income that retirees are able to bring in. A variety of states within the United States do not tax income, and it may be advantageous for the retiree to relocate to these states in order to lower their tax liability, which will allow retirees a higher level of income relative to their location.

Another option that is available to retirees is to consider a reverse mortgage. A reverse mortgage allows retirees to access a portion of the equity within their homes by exchanging a part of the equity of their homes for either a lump sum or a monthly payment that can be set for a specific period, or over the lifetime of the homeowners. Essentially, reverse mortgages serve as revolving credit lines that homeowners can access, and allows them to use the built-up equity within their property without losing property rights and privileges over the home. This can be highly advantageous to individuals without other streams of cash flow and income, as this prevents the sale of the property.

Regardless of the decisions that retirees make in regards to real estate, real estate remains as a highly viable income strategy for a significant portion of retirees. Although the market has shown weaknesses in the past, the future outlook is positive, and it is possible to acquire a significant income stream with careful investment and management of real estate options. Proper tax management is critical in this regard, as this can significantly lower the tax liability that retirees face, and can increase relative cash flow without an increase in the income stream.