Retire with real estate

What is retirement exactly?

Retirement is the point when a person stops employment completely. Whether it’s forced retirement, by illness or accident, or voluntary by the age of 65, we believe that you should have a solid retirement plan.

Why is it important to plan your retirement?

In the past, the idea of retirement did not exist. Life expectancy was much lower and we used to work until the end. This is no longer the case. We’re living longer and healthier lives; we should expect to spend more time in retirement than our parents and grandparents did. As we get older, it gets harder and harder to go to work. Every American worker deserves to fulfill the dream of a secure, comfortable retirement. With the Baby Boomer generation retiring, it is not wise to rely on pension funds and social security. We need to be able to enjoy our retirement without having worry of income and stability.

Do you have a retirement plan?

United States will experience a change of its age structure in the coming years. It is expected that between 2012 and 2050, the older population will almost double from 43.1 million to a whooping 83.7 million, causing more and more people rely on already strained social programs. It would be wise to plan your retirement privately.

It is important to see a certified financial planner (CFP) to determine your specific needs. First step is to determine how much monthly income needed to live comfortably. Then you may want to use future value and present value formulas to determine how much money you need to save now to achieve your future income planning. In order to have enough in the future, one must save and live below their income.

A diversified portfolio is our recommendation. Stocks, bonds, precious metals and of course, real estate. Albeit, real property ownership has been forever, it has not been widely used as part of a diversified retirement portfolio. Real estate is something financial planners do not have readily available. Most CFP may want to put into stocks and bonds, as they are familiar and comfortable with these options. The reason why planners do not recommend real estate is simple: one must use a self-directed IRA to buy properties.

Self-Directed IRA

A Self-Directed Individual Retirement Account allows investors to invest in alternative forms of investments. Through a Self-Directed IRA, an investor can invest in real estate, private mortgages, precious metals and private stock. Limitless investing allows investor receive high yield income and still accrue assets and income with deferred taxes. A trustee or custodian is appointed to handle all of the filing requirements with the Internal Revenue Service (IRS). There are several companies that provide this service.

Contact your Real Pro Agent to learn more about using real estate as a retirement vehicle.

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