Tuesday, March 28, 2006

How comfortably will you retire?

Just pick up any newspaper or magazine these days and you'll see how companies are cutting back on benefits. No more pensions, healthcare, etc. We're going to be responsible for our own retirement. I'm not so sure it's really sunk in yet.

My parents lived in the same home for 30 years. My dad worked at the same job for 32 years. They now live a modest, but comfortable life, as they have no mortgage payments, and have a steady income from a pension and social security. Their health benefits are better than mine.

Today, on average, we change jobs and refinance our homes every 3-5 years. The average 401K/IRA will not support a long retirement. I think we're often hoping money will just fall from the sky and take care of us.

My point is, we need to look towards alternative methods of taking what we have and turning it into future income. If you are approaching retirement and have property that has significantly appreciated, or you are selling a business, or have a stock portfolio or collection that you would like to receive benefit from, you will have significant capital gains tax due on sale. You can't afford to give away any more of your proceeds to the IRS than you legally have to.

So, find out about 1031/TIC exchanges, Charitable Remainder Trusts, and Private Annuity Trusts. If they are appropriate for your situation, it could mean the difference of playing golf in retirement or wondering where you're going to get the money to pay for your new prescription not covered under your health plan.

It's never too early to plan for your future.
Paula Straub
SaveGainsTax
Interview With the Pros

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