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Wednesday, June 11, 2014

Properties For Rent - The missing ingredient of your retirement plan

Properties For Rent - The missing ingredient of your retirement plan



It's no secret that America is facing a challenge in astronomical retirement. People are living longer than ever, and most of the citizens of our country do not have enough income to support themselves after retirement. 30 years, employees could count on Social Security and a good pension plan for the company through retirement. Unfortunately, today that is no longer the case. Pension plans are becoming extinct, and Social Security has numerous issues. It is unrealistic to expect that payments of benefits is likely to decrease in proportion of total retirement income needs one. That means we will be more responsible than ever for our own retirement income. That's a scary proposition for many people, but it does not have to be.



If you listen to the media, they will say that the money in your company sponsored 401 (k) or individual retirement account (IRA), which are good options sets. For example, if your company offers a 401 (k) with a company party, you should be maxing it out. Realistically, however, unless you have been making regular and substantial contributions to these retirement accounts since you were in your 20s, you're still unlikely to have enough money saved to retire with the same or better lifestyle have today. What is often overlooked is the impact inflation has on your savings. If you think you are making a return of 7 per cent in your retirement account, it really is more like 4 percent after the inflation factor.


Beyond inflation, the average life expectancy is increasing. The average life expectancy today is around 78 years. If you are planning to retire in 20 years life expectancy could be 85 years or older. We continue to make progress every year doctors that help push life expectancy even further away. Since we're talking about medical advances, but also ensures that talk about those costs. Medical expenses are not cheap, and that somehow continue to rise beyond the rate of inflation. So not only do we have to realize that living longer, but also the medical costs associated with that. Furthermore, while the average life expectancy could be 85 when you retire, do you really want to plan on just living until you're 85? What if the year is 85, and their savings gone? We need to have revenue streams that last as long as us.


While pension funds and social security, they certainly have their place, overlooked by most people is what could easily argue that the best investment vehicle for retirement homes there family rental alone. Rental properties have a number of amazing features for retirement planning vehicles do.

Properties For Rent - The missing ingredient of your retirement plan



Steady cash flow


Rental properties provide owners with a steady stream of income. Payrent tenants each month, you pay your expenses, and what remains is the flow of cash in your pocket. The beauty with rental properties as a vehicle for retirement is that the longer you have the properties, greater cash flow that tend to generate an income stream-that really grows on you. Rental prices increase over time, so unlike many other types of retirement investments inflation is almost canceled. The real trick is, eventually you will pay your mortgage, eliminating their biggest expense-leaving you with an even greater flow of income every month. It really does not matter how long I live, the revenue stream is there as long as you own the property.


In case of emergency


Beyond the rental properties monthly income stream to create, as you pay the mortgage and the property increases in value, your equity position in the property grows. In case of a medical emergency, for example, you could leverage that capital or outright sell the property to get the funds you need.


Legacy


Most people aspire to leave something for their children and grandchildren when they pass. Real estate happens to be one of the best things you can give to your descendants. When you die you will know that your family will be taken care of. They can enjoy the stream of monthly income you had during your retirement years, and then pass it to their children and so on. Or they can sell the property and use the funds for something else.


Self-Directed IRA


Previously, we touched on how most of America are actually saving for retirement are making use of traditional retirement accounts such as 401 (k) s and IRAs. There is nothing inherently wrong with the savings in these vehicles, the fact that they are saving all that takes a step forward in the average citizen. That said, the stock and mutual fund investments are losing many of the benefits obtained with rental properties. If you are enthusiastic about these advantages, but have now all tied up in an IRA savings account, you can still invest in rental properties using those funds. Self-directed IRAs allow you to purchase non-traditional investments within an IRA. There are rules and regulations regarding this type of investment, however, can be done. There are a number of companies out there that
can help you, and have made the process easier than ever.


Conclusion

According to the latest survey of confidence in retirement, only 13 percent of Americans say they are very confident they will have enough money for retirement. If you happen to be in the other 87 percent, take a closer look at rental properties as a means to ensure that dealing with in their retirement years. No other investment out there provides income benefits, growth and tax you get with the rental of real estate.

Properties For Rent - The missing ingredient of your retirement plan


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