Real Estate, Retirement Income, and the IRS Problem

In this episode of the Divorce the IRS Podcast, Jimmy Miller continues the conversation from last week’s episode on the FIRE movement by taking a closer look at real estate investing and how it fits into the Divorce the IRS framework.

Real estate is one of the most common investment topics Jimmy gets asked about. How does it compare to the stock market? Can it work as a retirement income strategy? Does it help or hurt when the goal is to reduce taxes in retirement?

Jimmy gives his honest perspective on the appeal of real estate, including the ability to own something tangible and understandable, while also explaining why he does not view rental properties as an ideal primary investment strategy for retirement.

In this episode, Jimmy discusses:

How real estate compares to long-term stock market investing
Why home values and investment returns are not always the same thing
The hidden costs of rental properties, including repairs, vacancies, insurance, HOA fees, and management
Why being a landlord may not fit the retirement lifestyle many people actually want
How rental income can affect the taxation of Social Security benefits
Why provisional income matters in the Divorce the IRS framework
How depreciation recapture works when a rental property is sold
Why some investors underestimate the tax bill that can come at the end
The difference between owning rental properties directly and investing in REITs
How REITs can offer real estate exposure inside a diversified portfolio

Jimmy also explains why real estate investment trusts, or REITs, may be a more practical way to include real estate in a retirement portfolio, especially when used inside Roth accounts where income and growth can potentially avoid creating provisional income.

In the next episode, Jimmy will discuss another popular retirement philosophy: the desire to die broke.

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