Hitting the traditional retirement age of 65 does not necessarily mean you are ready to retireat least, not financially. Social Security benefits alone are simply not enough for most people to live on, corporate pensions are rapidly disappearing, and even people who have done some retirement planning are finding it necessary to continue working well into their late 60s and even 70s. Two-thirds of baby boomers polled in a recent survey said the cost of living is too high today to truly retire and never work again. And it seems they are right: According to the U. S. Department of Labor, nearly 1 million people age 75 and older are working at least part-time.

Savvy boomers are growing their nest eggs before and after retirement by investing in real estate. In fact, by providing people with a relatively safe way to invest and generate cash flow well into their golden years, real estate functioned essentially as a retirement plan before such plans became part of the U.S. tax code. Of course, actual plans such as 401(k)s allow you to defer taxes, but real estate investing also provides you with a number of tax-saving strategies. My point is this: If you want a comfortable retirement, real estate can help you get it.

Lets return for a moment to the 401(k) model. If you happen to work for a company that offers this type of retirement savings plan (and not everyone does), youll make your contributions (which may or may not be matched by your employer) and have some limited options as to how the money will be invested. In general, you canbut dont have tostart withdrawing funds at age 59; with few exceptions, you must begin making withdrawals by age 70. Depending on how much you have invested and how much your funds are yielding, its possible for your 401(k) nest egg to steadily dwindle in the years after you begin taking distributions. And thats when many retirees head to work in grocery stores, fast food outlets, and other retail operations.

If instead you have secured your retirement with income-producing real estate and/or related investments such as mortgage notes, you will receive revenue from your investments without the regulatory restraints that apply to 401(k)s and other government-sanctioned retirement plans. Whats more, your capital (the property) is likely to increase in value as it generates cash flow, allowing you to provide for your heirs without having to sacrifice your own lifestyle.

To take full advantage of the potential offered by real estate takes knowledge. There is a wide range of options when it comes to real estate investing; you need to understand what those are so you can make the best choice for your particular circumstances and style. You need to know which strategies work in what markets and how to recognize economic cycles so you know how to respond to them, because educated investors can profit in real estate regardless of the economy. You need to know what to look for and how to maximize the opportunities so you can make the most of your investments and still have time to enjoy the other things that matter.

So, is real estate the new 401(k)? Actually, its the old 401(k). For hundreds of years, real estate has afforded security for retirees, demonstrating that the proven methods of smart investing and financial management have worked and will continue to work in all markets and all economic cycles.