Taking Your Retirement Plan To Retirement — It’s About Not Letting The Bastards Win.

Allow a small pity party preface tonight. I’m sneakin’ in here quickly to post. Between my home internet server, and my move to a different office location, internet for me this week as been mostly a rumor. OK, done whining — and thanks for lookin’ the other way.

Monday I alluded to how folks who’ve lost large chunks of their life savings this year, have a way to dig out if they act to take control. The Internal Revenue Code via Section 408 allows taxpayers to take charge of their own retirement plans. Is it more complicated than just switching from vanilla to chocolate ice cream? Uh, yeah. Is it rocket science? Hardly. Thousands of Americans have done it with only the predictable irritation of paperwork anyone would expect.

Tonight I’m mainly talkin’ to those who’ve already taken control and have wondered how they might invest in real estate. This isn’t new, it’s just orders of magnitude more timely.

There are indeed lenders who will gladly lend to real estate investors wishing to buy property through their Self Directed IRAs. Two things you need to understand. The amount of the down payment will most probably be around 30%. The interest rate will also be somewhat higher than if you’d bought the property yourself. Accept it, ‘cuz that’s the way it is, and no doubt the way it’s gonna be for the foreseeable future.

The good news? In 20 years you can turn less than $80,000 into around $750,000+. This assumes market conditions allowing for an average annual rise in value of 3-7%. Will that happen? I don’t know. I do know what I believe though — I’d much rather rely on real estate than Wall Street. How ’bout you? When was the last time you consistently benefited from 3-10% annual tax deferred dividends? Yer grinnin’ ‘cuz you know it’s a trick question. Hey, gave it a shot.

BawldGuy Axiom: My crystal ball is as reliable as yours. It cracked decades ago, and I still haven’t got it back from the shop.

All cash flow and capital gains over the years will remain untaxed ’till you take it out. There is absolutely no need, using this approach, for a tax deferred (1031) exchange. By definition your Plan’s profits/income are tax deferred.

If you feel like your recent 20-40% loss of capital in your Qualified Retirement Plan is the final act in your personal three act retirement play — I’m hear to tell ya different. It doesn’t hafta be the last hurrah. You can recover. Depending upon the time remaining ’till your retirement, you can at least make a pretty sizable step toward rebuilding your nest egg. I don’t say those words lightly. I realize more than most how important this is. The anxiety of these kinds of losses can at times be emotionally challenging.

Don’t allow it to paralyze you into inaction. Don’t accept these losses as anything more than a setback. It’s been long enough — so rear up on your hind legs and shake your fist at Wall Street. Don’t let the bastards win. A Purposeful Plan can be the star of your third act.

Bottom line here is that if you currently have, give or take $100,000 in your job’s Qualified Retirement Plan, you probably can turn it into a Self Directed IRA — with you in control. Takin’ control is what needs to happen about now, would you agree? Yeah, thought you might.

Let’s work together to make up for this bump in the road. And by they way? If you’re at the point where some relatively high interest rates flowing into your Plan sounds enticing about now, contact me and I’ll show ya how to get that done instead. It’s all about where you are with your own Purposeful Plan. Have a good one.

Related posts:

1. Taking The Steps Toward The Creation Of A Purposeful Plan
2. Real Estate Investors: How EIUL’s May Fit Your Purposeful Plan For Retirement
3. Smile –Getting Your Retirement Plan In Gear After 50 Is Only a Decision Away
4. Taking Control Of Your Retirement — Words — They Mean Things
5. Retirement Through Real Estate Investment — Constructing The Plan