Few asset classes are better suited to retirement portfolios than real estate. If managed sensibly, a portfolio of real estate investment trusts (REITs) can provide a steady stream of retirement income that will last a lifetime.
To start, REITs are incentivized by the tax code to pay outsize dividends. REITs pay no corporate tax at the federal level so long as they distribute at least 90% of their taxable income to their investors as dividends. The U.S. corporate tax rate is a punishing 35%, so we’re talking about a lot of extra cash.
But a good retirement income portfolio needs more than just a high dividend yield. You also want rock-solid stability. If you intend to live on cash from your investments, you can’t afford to suffer a dividend cut or a major business setback. So your best REITs for retirement will tend to be moderate yielders in stable, non-cyclical subsectors. Experience also counts for a lot here – you typically want to trust REITs that have survived a recession or two with their dividends intact.
Today, we’re going to look at 15 of the very best REITs to generate long-term retirement income. You’ll notice certain areas are missing, such as malls and office buildings; these are too sensitive to economic swings, and their biggest players slashed dividends during the 2007-09 meltdown and aftermath. Instead, you’ll find 15 reliable companies that should continue paying their dividends like clockwork, come what may in the economy.
SEE ALSO: 50 Dividend Stocks You Can Count On in 2018
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Date — November 22, 2017 5:00 am
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