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Retirement planning

Young people have no clue, and I can say this because I used to be a young people.

I never thought, when I was in my 20’s, that I would be my mother’s age.  I was just – and always just the age that I was in at the moment.  I would look at older people, even those just 15 years older than me, and disassociate with the reality that I will be their age in 15 years.  Of course it would happen someday, I thought, but someday was never real.

Well, now that I am my mother’s age of old, I wish I realized the truth of time catching up.  It happens, and it happens to every single one of us, even the young.  Youts (young ones), you will one day be facing retirement as an oldie.  You really need to do something about that today.

In America, we have great advantages and opportunities to prepare for our retirement years.  One of my favorites is the IRA Roth account.  Think of it as a stupendous savings account.  Whatever you put into the account is your after tax money (as opposed to regular IRAs that can be deducted from income for tax purposes).  The stupendousness of this account is that it can grow and expand tax free with cash flow, dividends, and/or appreciation, and when you are 59 1/2, you can take out any and all income, principal, growth, assets without paying any income tax.  Simply delicious and wonderful.

Anyone with income can open one at almost any bank, credit union, brokerage house.  There are limits of how much you can contribute each year, but there are ways to put more into those beautiful accounts.  [Because of the contribution limits of $5,000/year to a Roth IRA, and the much higher amounts that could be contributed to SEP IRAs, we would rollover our SEP IRA balances into Roths each year, pay the tax on the rollover, but offset it with new contributions to the SEP IRA which offset the tax.  Sounds complex but talk to your accountant about it if you are wanting to shift your regular IRA money to a Roth.]

Young people can put in up to $5000 per year, but even if you don’t have that much discretionary monies, put in $100, or $500, and make it a habit at least once a year, or once a month.  When you are Aunty’s age, you will be very glad you did.

Don’t ever take it out or you will be hit with penalties and possible taxes.  Instead, make it grow and grow and grow.

We used to use the funds in our self directed IRAs to play the stock market, but true consistent wealth is in real estate.  Buying commodities such as gold and silver can make you a very tidy profit if those metals continue to appreciate, and the current market is crazy for gold, but the crazy market can turn on a dime (pardon the pun) and make give you an unwelcome loss.

In this current crazy up market for gold and silver, if I could only put $1000 in a self directed IRA each year, I would buy gold or silver coins (with storage so I never take physical possession), and sell them when the price goes up dramatically.  I would buy again if and when it drops, and sell when it goes up again dramatically.  All that gain from the sales would increase the IRA but not be taxed.  It’s all ours to keep, and eventually use when we reach retirement age, if we want to.  This is a risky strategy though.

A more solid strategy, with more funds in the account, is to have a checkbook IRA for real estate investing.   This is the vehicle of choice for Aunty.  The platinum standard.

For easy to understand information on setting up your IRAs as well as a great source of information, check out an excellent website and service:  CheckbookIRA.com.

Jeff Olson says “The price of neglect is far greater than the price of discipline.”  Aunty really wants to impress upon you how important it is to plan and take action for your retirement.  It WILL happen, and what you do today will affect how good it will be later.

About The Author

Aunty is a new senior citizen and loving this phase of her life. Less responsibilities, less fear of being weird, able to do more of the things that I want to do! Older, yes, slower, yes, but life is even more wonderful in my golden years and I look forward to even goldener ones.

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