Buy Now, Retire Later-An Investment In Your Dreams

Owning A Second Home Is Easier Than You Think

Buying a second home is a serious financial commitment, but it is can also lead to a feeling of complete freedom. It can provide you with a vacation home, a place to escape from your mundane routine and an investment in the future for when you retire. Aging and wealthier households, smaller families and new technologies that allow professionals to work from remote places are all significant demographic trends. These trends indicate that buying a second home is becoming a more reasonable option for many Americans. The recent changes in tax laws are also making second home purchases more affordable. Strategically planning your purchase, consulting a trusted professional and taking your time are the keys to making the perfect investment.

Strategies For Retirement Investments

Planning for retirement early is smart, especially now. Many experts believe that as the Baby Boomer generation gets closer to retirement property values will increase at a rapid rate. More people will be buying second homes in high demand locations so locking in a lower price now can save thousands. If you are buying a house you want to retire in later be certain to consider all the possible changes and growth for the area. Many times development and increased populations change the face of a seemingly perfect location within just a few years. Another alternative to consider is investing in a home and using it as rental property first. At retirement you can choose to improve and make the rental home your primary residence. You can then sell or exchange and buy the retirement home of your dreams.

Tax Advantages Can Be Found Everywhere

Regardless of the avenue you take to invest in your retirement, the IRS offers tax advantages in a wide variety of ways. Mortgage interest and local and state real estate taxes are all deductible if you live in your second home a portion of the year. Write offs are limited to two homes. If you rent the home for less than 15 days you do not have to claim the rental income or pay taxes on it. If you rent your second home more than 15 days you must report the rental income. However, now all of the expenses used to run the property are deductible. Property taxes, interest, insurance, repairs, utilities, supplies, cleaning and maintenance are all considered expenses. Equity in your first home can also help with the purchase of a second home as a retirement investment. A home equity loan or line of credit can be used to cover the down payment on a second home. Be aware however, that borrowing in this way only allows the first $100,000 of equity debt to be written off.

Get Creative About Your Investments

Another tax strategy is using the IRS Code, Section 1031. Section 1031 says no gain or loss will be recognized in the exchange of property held for use in an investment. This allows savvy investors to purchase a property and later exchange it for one of like kind. For those planning to retire this means you can purchase a second home as a rental property/vacation home and build your investment. At retirement you can then exchange the property for the dream home you have always hoped for and defer the capital gains tax. The savings is incredible. Of course, real estate deals like this can be tricky so always take advice from a real estate professional and be certain all the transactions are done legally.

On Your Way To The Retirement Plans You Hoped For

Retirement can be a stressful topic for many people. However, more and more middle aged Americans seem to be using forethought and common sense to build the life they know they want to have after 65. Education, creativity, clear thinking, asking questions and knowing the kind of future you want to invest in is the way to achieve success. Using the tax system strategically to reach your goals will lead to a retirement full of joy, comfort and quality time to do what truly matters. When you are ready to search for a second home, or a place to start your retirement, enlist the help of a seasoned REALTOR. One that knows the market of the area you have targeted for your purchase and an SRES or ABR designation after their name. The SRES designation is the most important qualification to help you find the assistance you need. Now that you are ready don’t wait, start making your dreams come true!

Are You Prepared For A Life of Leisure?

Consider These Numbers…

"At the end of WWII, there were 42 workers paying into Social Security
for each person receiving benefits. Today, barely three people contribute
for each recipient. Projections are that by 2030, when most baby boomers
will have retired, just two working people will contribute for each person
receiving benefits. (Social Security Administration, Trust Funds
Report, 1992)."
(Saperston Asset Management Inc.)

"Social Security benefits will replace only 16% of the income of married
couples earning $50,000 to $100,000 and only 9.5% of the income of married
couples earning $100,000 and only 9.5% of the income of married couples
earning $100,000-plus. (Office of Research and Economic Analysis, Pension
and Welfare Administration)."
(Saperston Asset Management Inc.)

"Working people tend to think their retirement lifestyle will be better than
their current lifestyle, but retirees report their standard of living has
declined. Example: Twenty-six percent of workers say they are "just
making ends meet," but only 16% think they will live this way in
retirement. Of retirees, 20% are "just making ends meet," while 16%
describe their pre-retirement lifestyle this way (Employee Benefit
Research Institute)."
(Saperston Asset Management Inc.)

Is this the reward for a life of ardent labor and selfless devotion?
I would like to think not. I did not write this article with the intent
to trouble you, instead I have written it in hopes of awakening you to
the issue before it's too late.

Now that we have discussed the problem, let's discuss some solutions.

If you're still in your youth, roughly between the ages of 20 and 35 you
still have time to start a traditional savings plan that will over time
build you a comfortable nest egg for retirement. But my main focus
in this article is to help those with much less time before retirement.

What do you do when you only have a few years left before retirement
and you realize that you don't have enough set aside to live the life of
luxury and leisure that we all hope for. Should you put your dreams
aside and continue to work through your golden years? No one
should ever have to do this. No, instead I propose you take fate into
your own hands, flip it upside down, and shake it until his pockets are
empty. Than pick up the cash dust yourself off, and enjoy your life.

Ways to "Flip Fate" - Retirement Plans & Solutions

Money is a game of self education. Those who have it prosper, those
who don't fail. It's that simple. So pick an option and get educated,
your retirement depends on it.

401(k)'s & IRA's
Time to put these bad boys into overdrive. Start plunging huge chunks
of your monthly income into either your 401(k) or your IRA. If your
company provides a lucrative compensation matching plan, than hit
that 401(k) hot and heavy as it has the potential to provide a return of
up to 25% 50% and sometimes even 100%!

Stocks & Mutual Funds
If you know what your doing, or have an Einstein of a broker, you may
want to take a look into this option, as the stock market is a proven
money maker for those who know the game. For those who don't stick
with mutual funds and a good broker.

Second Job
This is not a pretty one, but drastic situations call for drastic measures.

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These last two are quoted directly from MSN's "Money Central" and
are probably the two which are the most immediately lucrative choices
you have.

"Plan to sell your house and buy a smaller one or get out of the real
estate market altogether.
This is especially true if you're planning to move to a retirement
community with lifetime services. If you need your home equity for living
expenses, you can always take a reverse mortgage."

"Start a business on the side.
There are many benefits to this, especially if you're close to retirement.
First, you can usually contribute up to 25% of your self-employment
income to a tax deductible Keogh plan even if you're already putting
money in another plan.

The second benefit is that your new knowledge and experience makes you
more valuable to your current employer. Third, if you're laid off or
experience job discrimination in terms of a pay raise, you have another
income. Also, once you're officially retired from your primary job, you
have a nice business that can continue to generate income. It gives you
some great tax deductions and still allows you to sock away money for
retirement, whenever you finally decide you can afford to slow down."

Your financial future is dictated by the choices you make today. Don't
let retirement sneak up on you as it has so many others. Make a decision
to take action today. Good luck, and enjoy your retirement!

Wishing you success,
Michael Bosse
mike_jb2@hotmail.com

Health, Wellness & Wealth - The Freedom and Time to Enjoy
Life to it's Fullest! Be part of the next Trillion Dollar
Industry...Health! Benefit from the best health products
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