This may not be new, but it is being used more and more these days - buying your retirement home now as an investment inside your IRA.
Many of us are watching our IRA accounts shrink and are wondering what will be there when you're ready to retire so you can buy the home you want where you want it. Instead of watching the traditional IRA investment languish waiting for the economic return, some people are using some of their funds (inside a self-directed IRA) to buy their retirement property now. The benefit is that you can take advantage of the Buyer's market now and buy while real estate prices are down and while there are good values to be had. Since it's a long-term investment you can be confident that it will grow over the long haul. You also have the benefit of a property that you can use for your own enjoyment right now or rent it to defray some carrying costs or any combination of both. Most importantly, it's yours and you will have it for retirement.
When retirement time comes, the market will be back and when you sell your primary residence you pocket and/or invest the capital for retirement income. You don't have to worry about buying in a higher-priced real estate market because you already made your purchase!
Another twist to this strategy is to not worry about finding and buying the final home you may want but to get into the real estate market with something now where you want to be. When prices go up, you will be selling for a profit to help purchase the final dream home. You also have the added benefit to live in your new location to determine where you would like to permanently settle.
To do this you will need an IRA trustee to hold the property for your benefit. There are several named companies that do this. You should consult with your financial advisor with regard to all aspects of this type of use for your IRA funds, the IRA rules and regualtions.
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