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Real estate investment trusts can generate income and provide inflation protection in retirement

  • About $1.5 trillion is invested in U.S. real estate investment trusts, according to Morningstar Direct.
  • REITs generate revenue through the properties they own and are required to pass on 90% of their taxable income to shareholders.
  • Long-term leases generally include inflation clauses.

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A view of an apartment building in the Chelsea neighborhood of Manhattan, New York City. Drew Angerer | Getty Images

Retirees who are worried about inflation eroding the value of their income may want to check out real estate investment trusts.

REITs are companies that own and/or operate properties like shopping malls, office buildings, warehouses and apartment buildings. Although they come with more risk than some other income-producing investments — such as Treasury bonds — they also have inflation protection built into them, experts say.

"Generally, REITs tend to do well in times of inflation, just because of their ability to increase rents and then pass that income on to [shareholders]," said certified financial planner Marco Rimassa, president of CFE Financial in Katy, Texas. 

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