For most working Americans, retirement savings are concentrated in workplace 401(k) plans, where investment options are typically limited to a lineup of mutual funds.
However, with self-directed accounts such as a Roth IRA or taxable brokerage account, investors can purchase individual stocks. For the former, the tax-sheltered nature makes income-producing assets like real estate investment trusts (REITs) especially appealing.
A REIT is a pass-through entity that owns real estate and, under IRS rules, must distribute at least 90% of its taxable income annually to shareholders as dividends.
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Though some trade on stock exchanges, REITs operate in distinct subsectors based on the type of property they own. For example, residential REITs lease apartments and single-family homes, while industrial REITs focus on warehouses, distribution centers and self-storage facilities.
One of the more dynamic subsectors is health care, which spans senior living facilities, hospitals, medical office buildings and skilled nursing centers. According to real estate industry organization Nareit, there are a total of 17 health care REITs across the FTSE Nareit U.S. Real Estate indexes.
However, not all health care REITs are equally appealing for retirement investors. To identify quality names, it helps to follow some basic, universal REIT investing guidelines.
First, always evaluate earnings using funds from operations (FFO), which adjusts net income to add back non-cash charges like depreciation that can distort profitability for real estate assets. Consistent FFO-per-share growth signals strength, but investors should also check payout ratios to ensure dividends represent a sustainable percentage of FFO.
Occupancy ratio is another key metric, showing what percentage of a REIT’s properties are leased; higher ratios generally reflect stable tenant demand. Finally, assess tenant concentration, since relying too heavily on one or two major operators, known as “anchor tenants,” can create risk if those tenants encounter financial trouble.
Here are five of the best health care REITs for a retirement portfolio:
| REIT | Market capitalization | Forward dividend yield |
| Welltower Inc. (ticker: WELL) | $134.5 billion | 1.5% |
| Ventas Inc. (VTR) | $37.5 billion | 2.4% |
| American Healthcare REIT Inc. (AHR) | $8.4 billion | 2.0% |
| CareTrust REIT Inc. (CTRE) | $8.1 billion | 3.7% |
| LTC Properties Inc. (LTC) | $1.7 billion | 6.4% |
Welltower Inc. (WELL)
Welltower is the largest health care REIT by market capitalization. While REIT size can also be measured by total assets or enterprise value, market cap is a useful proxy because these firms are publicly traded, and the figure reflects investors’ collective assessment of the value of their equity at any given time.
“Welltower’s market cap has increased five times in the past half-decade, and they’ve done so by perfecting the public REIT formula — it’s all about access to equity capital,” explains Alex Pettee, president and director of research and ETFs at Hoya Capital Real Estate. “It’s taken full advantage of the fact that it’s one of the few REITs that investors award a sizable premium to net asset value, and used ‘cheap’ capital to fund accretive acquisitions.”
Welltower focuses on senior housing, with properties across three key categories: independent living, assisted living and memory care. Each category differs in the level of daily support residents need.
The company’s third-quarter 2025 results were decent. FFO was $1.34 per share, representing a 20.7% year-over-year increase. The company also reduced its net debt relative to the total value of the business from 13.1% to 7.6%, an indication that Welltower has more financial flexibility going forward.
A defining feature of Welltower’s business is its active capital recycling program. Instead of simply collecting rent and holding the same portfolio indefinitely, Welltower consistently trims lower-performing assets and reinvests into higher-quality opportunities.
In the quarter, Welltower allocated about $1.9 billion into new investments, including money to build and improve senior living communities. It also sold roughly $30 million worth of properties and collected about $114 million from loans that were paid back.
Welltower currently pays a 1.5% dividend yield, based on its quarterly dividend of 74 cents per share. The upcoming quarterly dividend will represent the company’s 218th consecutive payment.
Ventas Inc. (VTR)
Ventas is the second-largest health care REIT by market cap after Welltower, at about $37.5 billion. Like its larger competitor, it invests heavily in senior housing, along with outpatient medical buildings and research facilities, which all benefit from aging demographics as a tailwind.
One area where Ventas stands out is its “triple-net health care” portfolio. In a triple-net lease, the tenant is responsible for property taxes, insurance and maintenance, on top of rent. For Ventas, these properties include hospitals, long-term acute care, inpatient rehabilitation and skilled nursing facilities.
For the third quarter of 2025, FFO was 88 cents per share, 10% higher than the same period a year earlier. A meaningful part of that growth came from same-store gains in the senior housing portfolio. This metric helps investors assess how existing assets are performing without the noise from acquisitions or sales.
Occupancy also improved by 1.6% from the second quarter of 2025, and by 2.7% from a year earlier, helping support stronger FFO growth. As a result, management raised its full-year FFO-per-share guidance range. Ventas currently pays a 2.4% dividend yield
American Healthcare REIT Inc. (AHR)
Welltower and Ventas dominate the large-cap end of the health care REIT universe, but many of the 17 health care REITs Nareit tracks fall into the mid-cap range between $2 billion and $10 billion. American Healthcare REIT is a good example.
It operates more than 19,800 beds across 291 properties, with a portfolio centered on senior housing and supplemented by skilled nursing facilities and outpatient medical buildings. For the third quarter of 2025, FFO was 44 cents per share, supported by strong same-store net operating income (NOI) growth of 16.4%.
Management also took advantage of a rising share price in 2025 by issuing new stock to raise capital. The company sold shares in the open market and through forward sale agreements, bringing in a combined total of about $519 million during the quarter and shortly afterward.
Issuing shares will dilute existing shareholders, but for REITs this is common and even accretive in the long term if executed at the right time. Selling stock when prices are high gives the company cheaper capital to fund expansions, acquisitions and development projects that can eventually grow FFO.
American Healthcare REIT appears confident in its trajectory, with management having also increased guidance for full-year FFO and strong same-store NOI growth. It currently pays a 2% dividend yield.
[READ: 8 Best Real Estate Stocks to Buy]
CareTrust REIT Inc. (CTRE)
A large share of health care REITs focus on senior living facilities because the landlord-tenant structure works well for long-term leases and predictable occupancy. However, the COVID-19 pandemic in 2020 showed this niche carries real tail risk. Senior housing REIT values fell sharply as mortality risks, safety protocols and staffing pressures disrupted operations.
CareTrust stands out within this segment. Only about 12% of its portfolio is in assisted living and independent living. The majority, at roughly 64%, consists of skilled nursing facilities, which have different demands tied to post-acute and long-term rehabilitation needs. CareTrust also has some international diversification, with about 24% of the portfolio in U.K. care homes.
Recent results have been strong. Third-quarter FFO was 45 cents per share, an 18% year-over-year increase. Like American Healthcare REIT, CareTrust raised capital by issuing about $736 million in new shares. It has been putting that money to work, reporting $437 million in new acquisitions, including 13 skilled nursing facilities spanning a combined 1,760 beds.
The current quarterly dividend is set at 34 cents per share, which works out to a 3.7% yield. Management reported a payout ratio of about 76%, which is sustainable and leaves room for reinvestment and future dividend growth.
LTC Properties Inc. (LTC)
Some health care REITs operate at the smaller end of the market-cap spectrum, and LTC Properties is a good example, with a valuation under $2 billion. Its 6.4% dividend yield immediately stands out, but it is important for investors to understand what kind of portfolio is supporting that payout.
LTC owns just under 200 U.S. properties, comprising roughly 60% senior housing and 40% skilled nursing. Many of these assets use triple-net leases. This reduces operating risk for LTC and provides more predictable cash flow.
Alongside traditional leases, LTC is also active in structured finance. It provides sale-leasebacks that allow operators to free up capital while staying in their buildings, while joint-venture arrangements give LTC a share of property ownership. The company also invests in preferred equity, mezzanine loans, and bridge or construction financing, which helps operators expand or stabilize their facilities.
Third-quarter 2025 activity shows LTC continuing its strategy of capital recycling. The company divested seven aging skilled nursing centers and is using the proceeds to buy newer, more stable senior housing properties. Average occupancy across its senior housing operating portfolio sits at 87%, which is improving but still below the level many investors prefer.
LTC has also been putting fresh capital to work. Management has completed about 85% of its planned $460 million acquisition pipeline, with over half directed to senior housing. That segment has now grown to nearly $450 million in value, representing roughly 20% of the company’s total asset base.
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5 Best Health Care REITs for a Retirement Portfolio originally appeared on usnews.com
Update 11/21/25: This story was published at an earlier date and has been updated with new information.
