Personal Finance Tips

Factors for Baby Boomer Retirement

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As a baby boomer it is important to plan your financial future now even more so than it was earlier in your life. Baby boomers today are challenged with their retirement planning due to declining pension plans, global economic crises, uncertainty in terms of social security and the rising costs for everything including healthcare. You are also expected to live longer than the generations that preceded you. Here are some factors to consider as you plan your retirement.

Consider who you may have to care for when you reach the age of retirement. You may need to care for your parents, your children or your spouse. Being prepared for unexpected scenarios is very important in terms of your well-being and financial outlook. If you need to care for others, will you be able to continue to work? Here are some tips to help you plan for financial security:

Decide how and when you want to retire

You may want to slowly step away from full time work and consider the option or working part time. There are more and more baby boomers that are choosing to start their own businesses to earn an income and perhaps do something that they have always aspired to do. You will be able to add more time onto your money saving years.

Plan for your own longevity

It should be noted that those people in the fifty plus population who are over the age of eighty five are the most rapid growing age group.  Your generation is living longer than ever before. There is a possibility that your life span may be greater than your wealth span which could leave you with insufficient means to live on. Plan to have an income of at least twenty to thirty years after you retire. You must also consider the fact that you may need healthcare. It is wise to contribute to a retiree healthcare savings plan which will also provide you with some tax advantages. You will have the funds that you need to pay for medical care during your retirement years. Long term personal assistance is not covered by most of these plans. Long term care costs are a very real threat to your financial wellness. You may want to consider long term care insurance to help protect you in the event that you do require long term care.

Look at different options for care solutions for your parent, partner or spouse

You may need to continue making an income instead of staying at home to care for another person. It may be better for you financially to consider hiring someone for care purposes so that you are free to work.

You may be better off to move outside of your home in later years

Although the cost of leaving home to go to a retirement center appears to be more than if you stayed home, this is not always true. You may not be able to care for the home and upkeep and you may need additional supports such as chair lifts or personal assistance that can be thousands of dollars in expenditure.

Getting professional advice can never hurt. Know your options and plan ahead for all scenarios.

 

Direct Real Estate Investment Strategies that Work

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There are three different types of real estate investment strategy that are effective. These include the methods of bargain purchase, increase value, and double digit cap rate.

Bargain purchasing means the purchase of real estate property that is below the current market value that. A good investment strategy is to purchase the real estate at a price of at least 20% less than current market value.

The increase-value strategy entails that you will purchase real estate at its current market value. However, you will only be choosing properties with some unrealized level of potential. After you complete your purchase, you must be willing to make whatever changes are needed to elevate the property value. Generally speaking, you must be able to increase the value of the property for at least 20 percent in order for this to be a worthwhile strategy.

The Double-digit cap rate investment strategymeans that you purchase the property on certain terms that it has a 10 percent or greater capitalization rate. To obtain the capitalization rate take the net operating revenue which is the rent less operating expenditure but prior to debt service, divided by the price of the purchase.

It is the cash-on-cash return rate that you would obtain if you outright owned the property. If there is no bargain purchase, it can be find to double-digit cap rates. They usually solely exist on a temporary basis in markets that are depressed markets or in market niches which are small.

The most common strategy forreal estateinvesting is to buy properties that you believe will soon increase in value as a result of market wide appreciation. However, you must purchase the property at the right time and in the right locale in order for this strategy to be successful. You must be aware of market fluctuations and risks as the market changes. Being able to act quickly and with certainty will determine the success of the real estate investment. Many billions of dollars have been made using this method but there is an element of precise timing that the investor must possess.

Other direct methods of successful real estate investment include long term and flipped properties.You will hold onto a property for several years and sell it when market conditions are right in a long term investment. Flipping the property is done very soon after purchase in the event that you can sell it for more than you purchased it for.

Various methods of direct investment can require certainamounts of time to devote to real estate acquisition and depend on the amount of cash that you have available. Certain strategies, such as purchasing foreclosures can demand large amounts of cash. However, some require no cash, including purchasing judgments which are real estate secured or from buying at builder auctions. Freed cash can make for an easier investment life. You should also take advantage of your real estate related aptitudes and employ strategies that allow you to maximize your strengths and minimize your weaknesses.

 
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