The sheer cold hard facts are that Baby Boomers are coming face to face with a major housing crunch and many are expected to struggle to afford their homes throughout retirement. According to the Joint Center for Housing Studies of Harvard University came out with some statistics to prove this. By 2030 there is going to be more than 73 million retirees that are 65 and older. Many of these retirees are going to need to put more than 30%. Part of the issue with this is that a good majority of Baby Boomers are entering retirement with less savings and more debt than previous generations. The majority of this debt happens to be mortgage debt.
While the findings go on to paint a bigger picture I wanted to focus on the fact that many Baby Boomers will be going to retirement with major mortgage debt and how you can make sure you aren't adding to this statistic.
While all of us would love to not fall into this statistic it is a lot easier said than done. Even thought it takes a lot of hard work and determination the fact is it can be done. You can get to retirement with little mortgage debt. It takes a bit of work on your part but again, you can do it! While there are plenty of ways you can get there I want to focus on one way that isn't quite as popular but that can make a big impact. There is a way to make sure that you do not fall into the same trap that Baby Boomers have gotten themselves into. Being able to afford your home during retirement is very possible with a rental property inside of a self directed IRA.
A self directed IRA is just like a regular IRA except for one major difference. The major difference with a self directed IRA is that the custodian (fidelity, schwab, etrade, etc) only allow certain investments inside of your retirement account. Most of the times they only allow for stocks and bonds. They may offer a few other choices but typically they allow for anything that can make them more money. If a custodian allows for a truly self directed IRA then the investments that you can put into your IRA is endless. Now that you know what a self directed IRA is we can begin to help you see just how you can arrive at retirement without having to worry about a mortgage.
The basic idea is to buy a home through your IRA and rent that home out. That way those who live there can pay the mortgage for you and your IRA can be diversified in something other than the stock market. Now the logistics of this aren't too difficult to figure out and with the help of Accuplan Benefits Services you will be able to set up an account and invest in that home you want. As with any retirement account a self directed IRA has certain rules that you must abide by. The following is a great starting point to learn about some of the self directed IRA rules. In our next post we will discuss some of the rules that pertain to self directed IRA investing and some of the rules that apply to owning real estate inside of an IRA.
Baby Boomers and any generation that still has yet to arrive at retirement can arrive with less mortgage debt with real estate IRA (self directed IRA with real estate). If you need help figuring out how you can get a real estate IRA contact us today or comment below for help.
Author: Nick Barker