Buy a House with Your IRA? Secrets No One Told You About

One of the most important aspects of enjoying your retirement is being able to pay for it. A majority of American's retirement savings are in the forms of 401(k)s and IRAs. Unfortunately many of these retirement accounts lost money in the past 5 years. One of the reasons for that is because typically IRAs are comprised of a small blend of stocks, bonds and mutual funds that are chosen by brokers.

What most people don't know, is that you can use the funds in your IRA to buy almost anything you want, and the income you earn from these investments is tax-free or tax differed. The big secret here,is that these types of IRAs outperform typical IRAs and 401(k)s and have lower yearly fees.

To get started with this type of investment strategy you simply need to convert your IRA or 401(k) into a Self Directed IRA. Then you can take the funds from your Self Directed IRA and literally write a check to buy investments.

Here are some of the things people are investing in using their IRA funds:

1. Gold and Precious Medals – This is one of the easiest ways to see at 30% annual return in your IRA. Sometimes you can even hold the gold or silver in your own home and have it still be part of your IRA assets.
2. Local Businesses – We recently met a restaurant owner who said that one of his investors was his sister who used money in her IRA to start the restaurant. Every month the profits form the business go straight into her IRA
3. Rental Property or Vacation Homes – Property prices are set to rebound and you can easily buy inexpensive properties where the rent gives you income to your IRA. With a combination of rental income and the rise in home prices, you could easily see a 10-25% return on your investment
4. Foreign Currency and Property – Its very easy to buy a small vineyard in Italy and a bank account full of Euros using your Self Directed IRA. You can have your dream home and have it pay you income!

There's a good chance you didn't know this was possible. That's because most bankers and financial advisers don't want you to know about it. They make money every time to buy or sell a stock that they recommend, and if the stock goes up they often take a fee as part of the profits! Bankers don't make money when you make a loan to a small business or a college student, or buy a house on the beach.

If you're at all interested in learning about how to do more with your IRA and turbo charge your retirement, or are just curious about what sorts of things you can use your IRA money for, read the FREE guide on Self Directed IRAs found at HoldYourIRA.com

I strongly suggest spending the next 10 minutes seeing what your options are.

I am an affiliate for HoldYourIRA.com, not because I am an expert on finances because I know a lot of you are trying to make smart decision about IRAs and Roth IRAs. I think the more we know the better we are at making those smart choices.

Catching the Boomerang: Downsizing?

By Barbara Torris (b+). She is a retirement blogger talking about a beautiful life style.
I was visiting with a blogging friend the other day and the conversation turned to boomerang-kids. This seems to be a conversation I am having frequently. I suppose it is on my mind. The question is How does the extra adult in the house come into play when it comes to  retirement saving?

Can people catch the boomerang before it lands in their front yard? Some people are not happy living with adult children and some are. If they are not, they need to be looking at a way to prevent their children from boomeranging.

The blogging friend's wife and I started the conversation with boomerangs and ended it with downsizing in retirement. We looked at each other in amazement as it occurred to both of us at the same time that many mid-life and retired people are downsizing so that, when the children need help, coming home to live will not be a choice. They know it would not be a happy situation for them. Interesting huh?

Could it be people are saving enough money by downsizing so they are able to help children in trouble but not make them dependent on them totally? The family remains on good terms and the children continue to mature and be self reliant. Helping pay part of the grown child's rent is a lot different than them coming home to live rent-free. The child could still be responsible for most of the cost and be forced to live within their means.

So, give it some thought. If a person is in a position where saving during those last few years of work is very important to their retirement, supporting an adult child can break the bank. There really should be a way to do both. It could be that downsizing is one strategy that should be considered.

What do your think?

How Early Should You Start Planning for Retirement?

Planning for retirement is often but on hold because Boomerang-kids are returning home during the period of time when parents need to speed up their retirement savings. I thought this article was particularly appropriate after writing the segment about the subject. Later Life is an organization providing educational workshops for future retirees. They had this to say about retirement planning. b+

Many people wonder when the best time to start planning for their retirement is. Some people think that the fact that we pay into a pension from a young age is enough, but few people realize that we should really up their efforts in planning for retirement around ten years before we’re due to stop working. This gives us sufficient time to prepare our finances and assess our options. Retirement is an exciting prospect; after all your hard work over the years, you finally get the chance to relax and spend more time with your family and friends, take up new hobbies, and enjoy yourself!

When should you begin...
 

As mentioned, some of us may pay money regularly into pensions and savings account, but then make no forward planning, and others may not have saved at all. When you reach the ten year mark, it’s time to assess your finances and begin to keep an eye on those all important funds. Think about the money you’re spending, and create a budget for yourself. Perhaps set a monthly or weekly budget, and check your bank balance on a regular basis.

Everybody sometimes underestimates how much they spend per day, especially on a food or clothes shopping trip with a debit or credit card! If you have Internet access, why not set up an Internet banking account? You can then check your account at your own leisure instead of waiting for your bank statement or going into your local bank, and transfer money across to your pension fund or savings account.

If you’re able to make more cut backs now, you’ll benefit yourself in the future. Pensions are usually a minimal budget, so saving now means that during your retirement you’ll have the money to still go on holidays and enjoy days out. You’ll certainly have lots of free time on your hands, so why not use it?

As retirement draws closer…

If possible, a few years before your retirement clear any debts to take away that added pressure during your retirement. Perhaps consider downsizing your home, or changing your vehicle to one that is more financially practical. Not only will both of these be cheaper for you, they may be more realistic as you enter into retirement.

How about also cutting down on your workload or work hours? Retirement is such a different way of life, that many retirees consider it a difficult adjustment - some feeling bored, or at times worthless. No longer do you need to be up early, work from nine until five and make your way home through rush hour traffic. You now have no obligations and are free to live a life of leisure! It’s best to ease yourself into retirement so that it’s not such a shock to the system. 

Use your final year wisely

It’s important to seek advice from a financial advisor in the last year of your working life. Not only can you gain valuable information and guidance, it allows you to make a plan for you and your finances in your retired life. Make sure that you have also informed the appropriate organizations of your retirement date. These may vary from the HMRC, who will help you to gain any benefits you may be eligible for, to applying for pension credit if you have been on a lower income.

A lot of people also find help in the form of retirement courses extremely useful. These courses, which can sometimes be organised through your place of work, can help you prepare for your upcoming change both financially and emotionally.

The trick to settling into retirement quickly and happily really is in the planning. Giving yourself plenty of time to prepare will  take away any extra pressure that you can definitely do without once you stop working.

When Parents Throw a Boomerang!

When the subject turns to boomerang-kids, people come crawling out of the woodwork with opinions. It seems many have quite a bit to say about something they have never experienced. I am here to have my say because I have...had a boomerang-kid that is. 

Out on the web...
I have been reading the posts and articles about the subject recently and I have found that the thinking of many is that the children are malingerer and just need to get out there and do something. A blog called Gypsy Nester calls these young people Boomerang Brats. After I read the post and all it's research, I had to agree. A lot of these children are taking advantage of their parents. 

Parents threw the boomerang...
But I have to take a less harsh approach. I think in a great many cases neither the parent or the child see the move as being a bad thing. And it is not just the children that promote moving back in with mom and dad. Parents could be held partly responsible for the trend. If it does turn out to be bad, there is plenty of blame to go around.

I think we need to talk about our performance as parents. We all know that each child is different and some are more mature or even capable than others. As a result our jobs as parents is a very complicated one and no parent does it in exactly the same way. It is very easy to judge parents and children based on what we see from the outside. But, as we all know, there is probably a different story  would be told if we could be a fly on the wall. For example, we do not know how the recent recession and it's fall out came into play in other people's lives.

The thing is I think most of us that have boomerang-kids are probably reaping what we sow. Those that "sponge" off mom and dad while they save money for trips or fancy houses need to take a good hard look at how that is going to affect their parents down the line. So the children need to take responsibility for their actions in that situation. 

But the parents also need to admit  they have planted seeds that grow readily when the child wants more or is in a little trouble. The child has been told  they will always be welcome to move back in if they want. In fact, when parents say this will always be your home too, they need to be very aware of how that might play out in their child's future. If the child is the type that will take advantage and not give back in anyway, that parent is in for a very hard time.

Out in the world... 
In an article written for Forbes called Get Off My Lawn: Living With Kids Makes Seniors Less Happy, they talked about how the experience of having a boomerang-kid in the house takes its toll on the parents.

They noted that parents between the age of 34 to 46 like to have their children at home even though they do find it more stressful. Senior people in United States are not seeing any positives in children living with them at all. Happiness falls while stress and resentment increases. 

But in my world....
Our son moved back home after being gone for almost 10 years. College, jobs kept him busy for all those years. I was glad to have him with us again. His father loved it. They watched ballgames together, went fishing and just visited for hours. The relationship they established during that time was invaluable to both of them. But we all knew it should not go on forever. I will admit I wondered how it would end and was grateful it worked out in a positive way. We all realized the time had come and passed for him to move on so that is what he did.

My husband and I had been retired for several years when we began the journey. We had a good income so when our son decided to make a career change, we were happy we could help him. He was going to school to get the training he needed for a well paying job. We actually invited him to move in at that time. He did not ask for our help.

I learned a lot from the experience and do not regret that time in our lives. The truth is my husband and I could not live happily in comfort  when we could help our son by sharing. We all worked together to make things better for him.

Bill Cosby even has some advice...
I remember a quote from Bill Cosby. It went something like this: "I keep reminding my children that I am the one that is rich. They aren't. It is my money. I give them an allowance. They have to live on that."

One of my adult children helped their daughters move out when they left for college and immediately used the bedroom space for a new purpose. If the child comes back for a visit, the space they use is not their childhood room. In their case there is never a feeling that the visit is an invitation to move back home.  

In fact, I think those children have always been told that would be the case when they were adults. It is probably the way we should all do it if we don't want to have our children boomerang on us.

It seems to me when there is a real problem and we are called to help, the children should know they are living at home again to solve that issue not because it is their right to do so. AND they cannot stay forever and ever.

That is what I think.  How about you? 

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