A. It is probably okay if you are very interested in real estate investment, have experience and are ready to deal with the potential work it brings to you.
What Matters is Income Stream
While many people are freaked about not contributing to 401(k), there is no need to get too caught up in the amount you are saving for retirement, because what matters is the income you will have during retirement. From this perspective, it makes sense to build a diversified income streams outside of your investment portfolio.
By buying rental properties, you can establish a sustainable income stream — an alternate form of cash flow from which you can benefit now and in the future. As the rental income grows, your 401(k) and IRA balances become less relevant. The rent checks you will receive monthly will alleviate the burden of amassing a large amount of money for retirement.
It Has its own Headaches
But, investing in real estate is just another part time job, while you can avoid the stress of watching stock market investments riding the economic roller coaster, dealing with bad tenants could be a real headache for inexperienced real estate investors.
The Question We All Need to Consider
So, the answer is that this approach could work, but not for everyone. It does raise an interesting question - What other income streams we should try to establish that could supplement the income from our retirement portfolios? What can we create for ourselves that could take the place of pensions, Social Security, and even our 401(k) plans?