Thinking about retirement is a good beginning, but you need to do something about it also.
You need to do something about it NOW.
The very best place to start is by setting up a Self-Directed ROTH IRA.
I realize it is a little more difficult than just calling Fidelity and saying you want to roll-over your 401(k) into an IRA. Sure, you could do that. And it would be easy, but it won’t get you to the finish line.
The Finish Line
So what is the Finish Line? It is enough wealth accumulated so that you have enough money to enjoy your retirement.
This is going to be measured by how much you will need each and every month to maintain your lifestyle.
The “Average” Baby Boomer has somewhere around $100,000.00 in their retirement account(s).
If they retired now and started “drawing down” that account each month, they could expect to get about $700 per month (if they leave the capital balance intact).
So, with their Social Security of approximately $2,500 per month and the income from their retirement account, they will get about $3,200 per month.
Most people need $8- 10,000 per month just to pay their bills. Thirty-two hundred isn’t going to cut it.
And remember, when you retire EVERY DAY IS SATURDAY. What does that mean? Well, simply put, everyday you will have more opportunities to spend money than you did while you were still working.
The average retiree will probably need an “extra” 20- 25% of income each month just to stay even.
So, how are you going to get to the finish line? That retirement account of yours will need to contain at least ONE MILLION DOLLARS. Two million would be better.
The average retirement account held by a traditional trustee, administrator, or custodian invests your money in stocks and bonds, mutual funds and ETFs. They maintain an average ROI (return on investment) of approximately 8- 9%. There are better things to invest in, but they are in the stocks and bonds business. It is all they do. It seems that it is all they know.
At eight percent compounded annually, your $100,000 will probably NEVER reach a million dollars. It definitely will not grow to $2,000,000.
If you are running on that track, you WILL NOT reach the finish line.
So what is the alternative?
How about investing your retirement funds in real estate? Oh, your fund won’t allow it? After all, they are not in that business, are they?
What are you going to do?
You are going to take those few “extra” steps necessary to set up a SELF-DIRECTED ROTH IRA.
You are then going to “fund” your account by either an IRA Roll-over, or my depositing “new” money into your new IRA.
You can do it, you just need to do it. NOW.
STEP BY STEP
Step 1: Let your Wealth Coach guide you through the process. He (or she) will find the right IRA Custodian who will allow “alternative” investments. Investments that you choose. Investments that offer higher returns than the traditional mutual funds sand ETFs.
Step 2: Fund your new SELF-DIRECTED ROTH IRA. Why does it need to be a Roth retirement account? Because you “expect“ massive growth, and you don’t wan t to pay tax on the increase. On a Roth account, you pay the tax on the money BEFORE you put it in the account, and then you are exempt from paying tax on the increase. If your Roth retirement account invests in a business that produces income and passes that income through to your LLC the holds your retirement account, your LLC will be responsible for the UBIT (the un-related business income tax). But the capital gains are exempt from all taxes.
You could ‘fund” your ROTH with $100,000.00 (roll-over from your previous retirement account), pay the tax on that $100,000.00, and then “earn” capital gains within your ROTH account and NEVER pay any tax on those gains. It is the best deal going, from the IRS. Get it while you can.
Step 3: Tell your custodian where you want your money invested. Or, better yet, let your wealth or asset manager invest it for you.
Your choices for possible investments are many. You may have enough money in your account to buy a particular property out-right, or you may want to participate in a joint-venture with other investors. You may decide to ‘loan” your money to someone else to invest in real estate or some other suitable asset.
You might even want to “invest” in non-performing mortgages, which you could re-structure or foreclose.
Like I said, the options are endless.
But, here is the important thing, if you manage this account properly you should be able to enjoy 15- 20% annual gains (or more if you are lucky, or good at investing).
The key is that at these higher rates of return, your retirement account will grow much more quickly than a traditional retirement account. And because your gains are tax exempt, you will need less to actually retire.
Remember, if you retire with a regular retirement account (and social security). Your monthly ‘income” will be subject to income taxes. However, if you retire with a ROTH account, the income you take from that account is TAX FREE.
Step 4: RETIRE
You can do it.
I can help. Call me.
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