The Essentials of Saving for Retirement

Saving for retirement is not like it used to be. The days when you could put some money in the bank or rely on the value of your home to pay for retirement are long gone. Instead most people will have to rely upon a number of complex investment strategies to save for retirement. These strategies do provide advantages over traditional methods such as letting money sit in bank accounts and will produce much higher returns and tax relief if you know what you are doing or have the help of a financial professional.

Keep Paying Yourself First
It is a good idea to keep saving for retirement even as you get older. Automatic savings on a biweekly or monthly basis provides the benefit of dollar-cost averaging which can significantly grow even a conservative investment portfolio over time. You can contribute to a Roth IRA until the age of 70 and to an annuity as long as you wish. There are even investment products called split annuities that retirees are able to contribute too even once they are already receiving an income from them. There is good reason to keep saving even into your retirement years and putting 10% of your income away every month is a good wealth building strategy that will ensure a financially comfortable retirement.

Deferring Income Tax
This is one of the most important principles to understand when saving for retirement. Federal income tax legislation allows everyone to set aside money for retirement in various types of tax deferred vehicles. Tax deferral essential means that you don’t pay tax on the income you’re earning until it comes time for you to withdraw it. This can lower your taxable income during your working years which is presumably when you will find yourself in the highest tax bracket during your lifetime. Most people have access to tax deferred retirement savings accounts such as IRAs and 401Ks through their employers or financial institutions. The advantage to these investment vehicles is that employers can match the employees’ contributions. Such contributions can effectively double your savings over time and they are tax deferred. The drawback to IRAs is that the level of contributions is restricted and persons with higher incomes are prevented from participating in them.  Fortunately there are some other tax-deferred instruments you can take advantage of in saving for retirement. There is no limit to the amount of money you can place in annuities and annuities are tax deferred. Nor are there income restrictions on annuities, so people with higher incomes would be wise to take advantage of them. If you have reached the limits of your IRA you can still keep your savings tax deferred by investing in a deferred annuity. Like bank accounts, annuities are insured so the money you invest is safe.

Avoiding Tax Penalties on Retirement Savings
There are tax penalties on savings for retirement that you should be aware of. If you take funds out of an annuity or a retirement account before you reach the age of 59½ you will have pay the normal income tax and an additional 10% in tax penalties. This means that you should not put funds you think you might need in the near future in tax deferred retirement investment if you are under 50 or 55. Persons under the age of 50 should keep a large percentage of their savings outside of these types of investment vehicles in order to avoid the tax penalties. Most investment retirement planners will recommend that individuals under 50 avoid buying annuities for this reason.
There is an exception to this rule if you have access to a TSA or Tax Sheltered Annuity where you can take funds out of the retirement savings investment that without paying the penalty. Unfortunately at this time, TSAs are only available to certain government employees such as school teachers and federal workers.

Inflation and Retirement Savings
If you want to have a comfortable retirement you have to adjust your savings for consideration of inflation. The standard rate of inflation is around 3% a year so if you are maintaining your retirement savings in an account that earns less than 3% interest you are actually losing purchasing power over time. The only way to compensate for inflation is to diversify your investment portfolio which should include an assortment of dividend paying equities, bonds and potentially even real estate investments. Indexed annuities are another viable options as they have a rate of return which matches that of the stock market. This will increase the value of the investment over time and protect your retirement savings from inflation.

Short Sale Properties in Florida

Short Sales on Properties in Florida

With more and more people facing foreclosure because of the poor state of the economy, short sales on properties in Florida are constantly rising. Not all lenders are willing to do short sales but many are beginning to embrace the practice as once the home is actually foreclosed upon, the lending institution is responsible for all maintenance and upkeep on the home. Banks aren’t in the real estate business and they certainly don’t want to foreclose on homes; all they want is the money that they lent to be repaid in a timely fashion. When homeowners can’t afford to make their mortgage payments anymore, the lender may consider allowing a short sale to at least recoup some of the money owed without losing more money by having to take care of the property. Short sales are a great thing for those interesting in investing in real estate and building long term wealth.

Dealing With a Short Sale

Honestly, short sales on properties in Florida are not an easy thing to handle. You absolutely must work with an extremely knowledgeable real estate agent to get through the red tape involved with the process. There is much paperwork involved and it is a really time consuming process. A short sale can take as long as a year from acceptance to closing so it is essential that you understand that the process is much different than any other kind of real estate investment.

After the Closing

After you have closed on the short sale property, you will certainly need to completely evaluate it thoroughly. It’s best to try to look at the home through the eyes of potential buyers or tenants to get a true feeling for your potential buyer’s needs. It can sometimes be helpful to get the opinions of friends or family as to necessary cosmetic upgrades however; a professional inspector should be consulted regarding the inner workings of the property such as the water, electric, heat, air conditioning and septic system.

Make that House to Die For

With the downturn of the economy, there are many houses on the market today. Because of the numerous options that buyers have, it is essential that you make the property you bought on short sale stand out and make people have to buy your house. A fresh coat of paint just isn’t enough to make your property get to the top of homebuyer’s lists. You need to use innovative techniques to make the property incredible without spending tons of money.

Back To The 1960’s

Out of date kitchens, bathrooms and décor are immediate turn offs to potential homebuyers. For the most part, people want to buy a house that is turnkey as opposed to a house that requires tons of work. This is where you can capitalize and earn a fair amount of money while rehabbing short sale properties.

The most important room of the home is the kitchen when it comes to selling a house. The kitchen must be in absolute tiptop shape and knock potential buyer’s socks off. This isn’t as difficult as it sounds. If the cabinets are wood, a fresh coat of stain and new, modern hardware can make it look like you’ve spent thousands installing new cabinetry. Countertops can be an expensive upgrade but is essential if you really want to wow your potential buyers and make that needed sale. The tile should be in great condition and that includes the grout. Cleaning grout is a nasty job and often doesn’t make the floor look new again. You can simply clean the floor and re-grout the tiles to give the kitchen a brand new feel. Of course, new stainless steel appliances are a must if you want to get top dollar for your property.

Beware of the Bathroom

Buyers are big on bathrooms. They are looking for luxury when it comes to the bath area and you can give them that element without wiping out your bank account. If the floor and shower areas are tiled, you can re-grout them to make them look like new. In the event that there is a plastic shower or tub surround, you'll need to tear it out and put in tile. Nobody wants to buy a house with a tacky, old surround in the bathroom. It would also be wise to upgrade the vanity, if needed and install new faucets and towel bars to give the room a put together look. Be sure to stage the bathrooms with luxurious towels and a nice shower curtain to make the room feel like it’s a spa.

Beautify the Boudoir

Another important selling feature of a home is the master bedroom. The master bedroom must give potential homebuyers the feeling of romance and relaxation. This is absolutely essential if you plan to get top dollar. You don’t need to spend a lot to make this important room into the bedroom of every potential buyer’s dreams. Being a little creative can make the master bedroom to die for in the eyes of potential buyers.

A soothing color of paint such as sage green or apricot will not only appeal to the potential buyer but also draw them into the room and make them feel comfortable. Of course, the bedroom must be properly staged with furniture and furnishings that complement the wall color and ooze romance. Don’t forget to have long draperies and numerous throw pillows on the bed to give possible buyers the full romantic effect. Freshly cut flowers on a nightstand will enhance the appearance of the bedroom.

Let the House Flow

The house should have a general flow to it. This means that you shouldn’t stage or decorate each of the rooms in a completely different fashion. If you’re going for the coastal living theme, don’t put old fashioned colonial, ultra-modern or other types of furniture in any of the rooms. Themes sell homes and people like to understand the home that they are about to purchase. If the whole house has the coastal theme going on, people will embrace the laid back Floridian style and want to try to purchase the house.

Please Don’t Eat the Daisies

It is really important that the curb appeal of your property reflects the feeling that you are attempting to convey inside of the home.  The plantings necessary depends upon the style of home. If you are going for the coastal look and feel, colorful grasses including Pampas grass can have a dramatic effect as well as Bird of Paradise and other tropical plants. You can capitalize with short sales on properties inFlorida if you truly have the desire to make money investing in real estate.

Building Long Term Wealth Through Real Estate Investing

Building Long Term Wealth through Real Estate Investments

Many financially savvy people are beginning to realize the incredible opportunity to make a great deal of money through well thought out real estate investments. With the wide variety of foreclosed on properties and short sale offerings on the market today, people who are seriously seeking to make money in the real estate industry simply must take action immediately. The real estate market is constantly changing and if it takes an upswing, you will wind up spending tens of thousands of dollars more than you would pay today. No one can afford to lose that kind of income potential.

Get the Right Professional Advice

It is a smart thing for first time real estate investors to have a team of professionals that he can count on for solid advice. Of course, you will need a highly skilled and knowledgeable real estate agent to help you locate and sort through the many properties that are on the market. A qualified and licensed home inspection professional will be able to see beyond the cosmetic issues of a property and get to the nitty gritty systems that are ever so important. The inspector will give you a complete list of the workings of the property and exactly what systems need to be addressed. You will certainly need to enlist the help of an experienced real estate attorney to handle all of the legalities involved with purchasing investment properties. You should also consult with a knowledgeable accountant who can help you with reducing taxable income through real estate investments. Your accountant will also be able to advise you on innovative strategies for building long term wealth in the real estate industry.

Get a Woman’s Point of View

This may sound sexist but in all honesty, the matriarch of the family nearly always has the final say on whether the family is interested in the property or not. Many people believe that men make the final decisions but that is absolutely untrue. In no way, shape or form should you start painting the walls pink or installing mauve wall to wall carpet but small and subtle accents such as flowers near the front door or nice kitchen appliances will do the trick. Catering to the true decision maker’s desires will surely help you to get the property rented by people who will take good care of it. It’s wise to have several female friends or family members give you their opinions on the home before attempting to market it.

It Must Be the Money

Money is the key to building long term wealth through real estate investments. It may sound a bit cliché but you need to spend money in order to make money. Upgrades and creature comforts installed in the rental property will increase the amount of money that you earn from your investment. You don’t need to install a spa in the house but you can make the bath areas have the spa feeling without breaking the bank. You can simply refinish or purchase new vanities, install new and matching faucets and fixtures and have great ceramic or marble tiles put into the shower area. Making the best impression and showing the potential renters how the home can be and how wonderful it would be to live there. Those who are building long term wealth in the real estate industry understand this concept and use it to their full advantage. You should do so too.