When it comes to retirement planning, most advice focuses on maxing out your 401(k) or IRA so you don’t leave money on the table. However, according to money expert Grant Cardone, founder of Cardone Ventures and 10X Studios, relying solely on traditional retirement accounts could be a mistake.
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Cardone, who has built a multi-million-dollar empire, believes the key to financial freedom in retirement is thinking beyond conventional strategies. Instead of following the crowd, he recommends four powerful tips to help you maximize your retirement savings, grow wealth faster and secure your financial future.
Invest in Income-Producing Real Estate
Grant Cardone’s retirement advice doesn’t rely solely on retirement accounts in your golden years (among other forms of savings). “Saving money is a trap. 401(k)s are a trap,” Cardone said.
If this sounds contrary to what you’ve learned about how to maximize your retirement savings, Cardone isn’t surprised. On his website, he prides himself on teaching people to “rise above outdated, unworkable middle-class myths and limitations.”
Cardone prefers to invest in income-producing real estate, stating that he doesn’t want a “lump sum” at retirement, but “cash flow.”
He told GOBankingRates previously, “If I had a net worth of a million dollars, I want it to pay me $5,000 a month. That’s what I’m looking for. I’m looking for $60,000 a year in income that I can live off of and not [have to] tap into my million dollars in capital.”
He recommended investing in properties that can pay 6% per year, which is competitive with the market. And he recommends being able to situate yourself where you don’t personally have to manage the property.
The benefits of real estate also include tax write-offs and the ability to leave a legacy to any heirs. Cardone has said that 95% of his wealth is invested in real estate, so he’s literally taking his own advice.
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Don’t Rely on the Market
Cardone believes in retirement planning beyond a 401(k), but keep in mind, he also does not believe in trusting your money to the market. This might fly in the face of some of the other “best” retirement tips for building wealth, but it doesn’t seem to have worked for him.
He previously told GOBankingRates that he started looking for assets where he wouldn’t lose money when he was as young as 30 (he’s 65 now). “That means I can’t just save money because money is going down in value. I can’t be in the stock market because I could lose money.”
Story ContinuesSet Your Retirement Savings Goal Higher
Though Cardone has made clear that he prefers his retirement income to come from real estate over other traditional investments, if you are going to use 401(k)s or IRAs, he explained in a guest post for CNBC that you’ll need to raise the bar on the amount you plan to save.
For years now, experts have recommended having at least $1 million in retirement savings, given that you may be living off that income for several decades. However, Cardone suggests that the number needs to be startlingly higher — more like $10 million — if you want to live the same quality of life you may be used to. A number you aren’t likely to get just by saving money. Investing will be necessary.
Aim for Saving 40% of Your Income
Ideally, you would be able to get to an income level where you could save 40% of your gross income before taxes, Cardone suggested, and invest whatever cash is left in assets that produce income (hint: real estate). He recommended you avoid investing anywhere that you run the risk of losing your capital.
Wealth-building tips for retirees may seem like a dime a dozen, but if you want to know how to grow your money for retirement, you might want to listen to some expert retirement advice. While the average American might find these goals lofty beyond reach, striving for them can only benefit you in the long term.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: Grant Cardone’s 4 Ultimate Tips To Maximize Your Retirement Savings
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