Real Estate - The New Retirement Financial Planning Mantra for a New Economic Climate
Our retirement funds go through their ups and downs. The markets go up, and we look up from the paper with a big smile on our faces. The markets go down, and we may want to hide our face in the paper. But really, as you debate whether you've made the right choice with your retirement investments, you have to agree that often, not often thought gets put into the understanding of the whole retirement investment idea. To begin with, inflation, even if it always hovers around a friendly 3%, can take a substantial bite out of your investments. What you could get in a home in the '90s for $100,000, will cost you around $250,000 now. Over time, even a modest 3% inflation rate can add up; your retirement financial planning just cannot do without a good bit of inflation planning.
Let's say that as often as you find these disappearing these days, that you have the benefit of a corporate (or government) pension. You will have a variety of pension options; often, your employer will make the right kinds of calculations here. But far too often, there can be mistakes, intentional or unintentional, that can leave you with less that you are due. Getting a pension consultant to look through your papers, always makes sense. Your consultant can come up with all kinds of helpful suggestions once he finds out more about your retirement financial planning vision. If you have a target date retirement fund, one that automatically turns your money to safer investments as you grow closer to your retirement age, it might be a good idea, it might be suggested for instance, to terminate the fund once you retire. And the older you grow past that date, the safer still your investments should be.
Wise retirement financial planning system would be, that as you retired, you lived off your post-tax retirement savings. And then, when you've run through that money, you can switch to your IRA or your 401(k) tax-deferred accounts. And then, you can turn to your Roth IRA. All of this sounds just great; but after last year's investment market meltdown, are we really sure that our investments, no matter how conservative you think they are, couldn't lose value in the blink of an eye?
The general rule should be, that mutual funds are much safer from retirement financial planning incompetence, than, say, hedge funds. Mutual fund investors did suffer a lot last year; if you're that way inclined, you could look at a certain cast iron investment option: real estate. Two thirds of those who continue working after retirement age, would be spared the indignity if they had invested in real estate. As much as every other kind of investment has cratered, real estate has been an unstoppable force. But investing in real estate as a part of your retirement financial planning, can put you on the road to major tax burdens, if you're not careful.
If you invest in real estate for your IRA, you can normally keep your investments tax-free until you're ready to get a withdrawal. You'll probably have to find a broker who is willing to do property with retirement funds. Things can get very flexible with companies like Lincoln trust of Denver or Pensco. The sooner you find out how to move your retirement planning over to real estate, the better. If you have a Roth IRA, this becomes very easy. All you need to do is a little planning with forethought, and you could be set for life.
Our retirement funds go through their ups and downs. The markets go up, and we look up from the paper with a big smile on our faces. The markets go down, and we may want to hide our face in the paper. But really, as you debate whether you've made the right choice with your retirement investments, you have to agree that often, not often thought gets put into the understanding of the whole retirement investment idea. To begin with, inflation, even if it always hovers around a friendly 3%, can take a substantial bite out of your investments. What you could get in a home in the '90s for $100,000, will cost you around $250,000 now. Over time, even a modest 3% inflation rate can add up; your retirement financial planning just cannot do without a good bit of inflation planning.
Let's say that as often as you find these disappearing these days, that you have the benefit of a corporate (or government) pension. You will have a variety of pension options; often, your employer will make the right kinds of calculations here. But far too often, there can be mistakes, intentional or unintentional, that can leave you with less that you are due. Getting a pension consultant to look through your papers, always makes sense. Your consultant can come up with all kinds of helpful suggestions once he finds out more about your retirement financial planning vision. If you have a target date retirement fund, one that automatically turns your money to safer investments as you grow closer to your retirement age, it might be a good idea, it might be suggested for instance, to terminate the fund once you retire. And the older you grow past that date, the safer still your investments should be.
Wise retirement financial planning system would be, that as you retired, you lived off your post-tax retirement savings. And then, when you've run through that money, you can switch to your IRA or your 401(k) tax-deferred accounts. And then, you can turn to your Roth IRA. All of this sounds just great; but after last year's investment market meltdown, are we really sure that our investments, no matter how conservative you think they are, couldn't lose value in the blink of an eye?
The general rule should be, that mutual funds are much safer from retirement financial planning incompetence, than, say, hedge funds. Mutual fund investors did suffer a lot last year; if you're that way inclined, you could look at a certain cast iron investment option: real estate. Two thirds of those who continue working after retirement age, would be spared the indignity if they had invested in real estate. As much as every other kind of investment has cratered, real estate has been an unstoppable force. But investing in real estate as a part of your retirement financial planning, can put you on the road to major tax burdens, if you're not careful.
If you invest in real estate for your IRA, you can normally keep your investments tax-free until you're ready to get a withdrawal. You'll probably have to find a broker who is willing to do property with retirement funds. Things can get very flexible with companies like Lincoln trust of Denver or Pensco. The sooner you find out how to move your retirement planning over to real estate, the better. If you have a Roth IRA, this becomes very easy. All you need to do is a little planning with forethought, and you could be set for life.