Today’s typical U.S. household has less money in savings than ever before and the majority of retirees are relying on social security as a primary source of retirement income, despite the fact that the program is rapidly running out of money. As a result, more investors are turning to alternative investments like real estate to attain financial security for their golden years.
Read on to see what to expect from Social Security in the future and how buying with an IRA account can provide financial security, as well as ongoing, secure, reliable retirement income for years to come!
Planning for a Secure Retirement
In May of this year, financial services giant Northwestern Mutual released new data showing that at least one out of every three Americans currently has less than $5,000 in retirement savings, which is aligned with reporting from the Federal Reserve and Business Insider. In fact, the Fed’s most recent consumer finance survey shows that the median bank balance among individual U.S. consumers is below $3,000 and the average balance per household is just $12,870…
That number is less than what Bank of America reported more than 20 years ago in 1997. Why does all of this matter? Because most retirees are now relying on social security for income, but the program’s cost has exceeded its tax revenue since 2010, which is effectively burning through its savings.
Social Security is Running Out of Money
According to the U.S. Secretaries of the Treasury, Labor, and Health & Human Services – which collectively make up Social Security’s Board of Trustees – the shortfall in 2017 was $59 billion, which is 11 percent worse than the deficit in 2016. With each passing year, these annual deficits will deplete all of the program’s savings by 2034.
Although 16 years may seem like a long way off right now, when you’re talking about retirement it will be here before you know it… Especially because the math just doesn’t add up. But what can the average investor do to protect hard-earned savings and secure ongoing retirement income? One way is to buy income-producing real estate with your IRA account.
Buying Real Estate with Your IRA Account
Many investors don’t realize that the IRS permits retirement accounts to invest in real estate and other alternative investments, which can provide essential portfolio diversification, tax deferred income and a hedge against inflation. The most common way to buy real estate using retirement funds is to roll money into a Self Directed IRA account out of your existing 401(k), ROTH or Traditional IRA.
The process is simple and easy to do with the help of an experienced real estate investment advisor, who can also help you find investment properties that will benefit from the positive effects of consistent property appreciation and ongoing rental income. Since real estate is a tangible brick-and-mortar investment, it is also much more secure than stocks, bonds and mutual funds… Provided you buy turnkey, income producing property in a dynamic real estate market.
Do you have questions about buying real estate with an IRA account? Share them in the comments!