Planning For A Comfortable Retirement
Do you own a home? The good news is that a home is a source of
untapped reserve cash, something that most of us do not
realize. Americans are not good at leveraging the value of
their homes as a financial tool to its full potential. One of
the biggest reasons is the apprehension of losing the house.
However, if one spends time in evaluating the various
investment options, the returns on using the home for equity
outweighs the risks involved. This could not have been truer
than today where the interest rates are abysmally low. You can
make money by utilizing the cash equity of your house and
investing it in certain funds that can give you a return of 18%
to 20%. A wise investment decision, even if you have to borrow
money against your house.
Most of us do not comprehend most of the investment options,
which include growth funds. We only know the option that has a
sure bet of certificate of deposit. We fail to realize the
enormous potentials that other investment options provide in
making the money grow faster. One such other example is the
401k. A self-employed professional should utilize the SEP
retirement option to reduce the tax liability. If not, then
home equity should be used either as an investment option to
add to your 401k or in creating a SEP that lets you invest in
profitable and reasonably safe global growth funds.
Stock markets also offer exceptional opportunity, more so if
you are some years away from retirement. There are segments of
the market like the overseas market, energy market, and
domestic real estate market that have the potential of
sustained growth.
Reverse mortgage is another retirement option. It is not a
means of putting together a corpus for retirement but helps you
in utilizing the equity that you have built in your home. This
can ensure that your monthly income in your retirement years is
sufficient to meet your important needs like food, clothing, and
medicine. This can be a saving grace if your retirement planning
was not adequate. Under a reverse mortgage, a person can
withdraw a monthly figure against the home equity. Since the
interest payment is postponed until death, there is no need of
either borrowing money to meet your expenses nor is there a
financial burden of making monthly payments.
So if you are on the other side of 40 and you have not planned
for your retirement, either yourself or with the help of a
financial advisor, it is prudent that you initiate the process
right now. You can hire a consultant who you can rely on and
assess your retirement needs along with your capability of
meeting those retirement requirements out of your current
income. And don�t be surprised if you find that you are
completely unprepared for your retirement. However, if you
possess a home, it can be your saving grace!
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