tag:blogger.com,1999:blog-44295776574577701742024-03-28T20:30:14.536-07:00Spectrum of SolutionsDannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-4429577657457770174.post-11248874720648079332023-08-01T12:55:00.006-07:002023-08-01T15:09:50.050-07:003 Truths about Reverse Mortgages<p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="color: #343541; font-size: 16px; white-space-collapse: preserve;"><b>Truth #1: A Reverse Mortgage Can Fill Income Gaps </b></span></p><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="color: #343541; font-size: 16px; white-space-collapse: preserve;">A reverse mortgage borrower doesn't have to take all their equity at once. And a key feature about a reverse mortgage is, there are no monthly payments. </span><div><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="color: #343541; font-size: 16px; white-space-collapse: preserve;"><br /></span></div><div><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="color: #343541; font-size: 16px; white-space-collapse: preserve;">Other factors to consider include:
<ul style="text-align: left;"><li><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="color: #343541; font-size: 16px; white-space-collapse: preserve;">Maintain investments and avoid dipping into savings by leveraging reverse mortgage proceeds to increase cash flow. </span></li><li><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="color: #343541; font-size: 16px; white-space-collapse: preserve;">Keep the flexibility of a stock-heavy portfolio without worrying about the impact of market downturns on your main source of income. </span></li><li><span face="Söhne, ui-sans-serif, system-ui, -apple-system, "Segoe UI", Roboto, Ubuntu, Cantarell, "Noto Sans", sans-serif, "Helvetica Neue", Arial, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji"" style="color: #343541; font-size: 16px; white-space-collapse: preserve;">Leverage an equity reserve with a reverse mortgage line of credit that offers increased borrowing power over time. </span></li></ul><div><br /></div><div><b>Truth #2: Equity Is a Viable Retirement Strategy</b>
</div><div><br /></div><div>Though often dismissed as a source of retirement income, home equity can be a major factor in one's retirement portfolio. Though home equity in older people’s homes has doubled since 2010, many are not using it to their advantage. The National Reverse Mortgage Lenders Association reports that older adults had $11.8 trillion of equity locked in their homes in 2023. <br /></div><div><br /></div><div><br /></div><div>T<b>ruth #3: A Reverse Mortgage Can Help You Stay in Your Home</b></div><div><br /></div><div>Many retirees want to continue to live in their homes, In many cases, they can use proceeds from a reverse mortgage to make needed repairs.</div><div><br /></div><div><br /></div></span></div>DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-90295152485062557252023-07-25T04:36:00.000-07:002023-08-01T13:05:05.340-07:00Three Benefits to Working Past 70<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Arial, Helvetica, sans-serif;">Besides for the benefits of still earning money instead of tapping into retirement funds, there are three additional benefits to working past 70 that many people don’t realize:</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">1 – The social security administration re-calculates your benefits every year based on your 35 highest-earning years. For example, if you’re age 70 and you currently have a job that pays near your highest level, you can boost your social security income by replacing your lower earning years with your current higher-earning years. While this little-known fact won’t help you if your income is closer to your lower earning years, it may be useful if you work in a higher-income profession such as law, medicine, accounting, etc.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">2 – If you wait until age 70 to start taking social security benefits, you may be able to increase your benefit by up to 8% per year that you defer your benefits. This could have a significant impact on the amount of social security income that you’re able to enjoy during retirement.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">3 – Experts on aging have noted that working longer can have health benefits for people who enjoy their jobs. After all, today’s retirees tend to be a lot healthier and more active than their parents were at similar ages. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">Bottom line: don’t short-change yourself without evaluating all your options!</span><br />
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<em><span style="font-family: Arial, Helvetica, sans-serif;">Source: CMPS Institute</span></em></div>
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DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-44403437612531172982023-07-11T04:15:00.000-07:002023-08-01T13:05:40.299-07:00Three Important Facts About Social Security<div dir="ltr" style="text-align: left;" trbidi="on">
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Many pre-retirees don’t fully understand how social security benefits work according to a recently released study conducted by AARP and the Financial Planning Association. <a class="green" href="http://www.aarp.org/content/dam/aarp/research/surveys_statistics/econ/2015/fpa-soc-sec-and-beyond-res-econ-secured.pdf" target="_blank"><span style="color: #1072b7;">Click here</span></a> to view the full study. Here are three important facts from the study that I found to be very useful:<br />
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<strong>1 – You can start taking benefits at age 62</strong><br />
The earliest age you can start taking social security benefits is age 62. However, the longer you wait, the more benefits you can collect. For example, you may be able to collect 25% - 30% MORE benefits if you wait until full retirement age, which is currently between age 66 and 67, depending on when you were born.<br />
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<strong>2 – You can defer your benefits up to age 70</strong><br />
Waiting until age 70 to start claiming benefits can boost your benefit by up to 8% per year that you wait. This is known as the “Delayed Retirement Credit”. <a class="green" href="https://www.ssa.gov/planners/retire/delayret.html" target="_blank"><span style="color: #1072b7;">Click here</span></a> to view a helpful chart on the Social Security Website.<br />
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<strong>3 – Spousal Benefits May Apply</strong><br />
A divorced individual can collect social security benefits based on the ex-spouse’s work history if the couple was married for at least 10 years.<br />
Bottom line: make sure to evaluate your social security options with a financial planner before making any decisions that may impact your retirement plans!<br />
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<em>Source: CMPS Institute</em></div>
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DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-45596708426841936882023-06-22T05:53:00.000-07:002023-08-01T13:07:00.232-07:00Is Student Debt Standing in the Way of Homeownership?<div dir="ltr" style="text-align: left;" trbidi="on">
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Student loan balances have doubled since 2007 to well over $1 trillion.
Meanwhile, millennials are taking much longer than previous generations
to buy their first home. A recent study examined whether student loan
debt is preventing young adults from purchasing homes*.<br /><br />Surprisingly,
the study concluded that there is no causal relationship between
student debt and delayed home-ownership. In fact, debtors in their late
20s were more likely to own a home than non-debtors. The study gives
several alternative explanations for why millennials are delaying their
first home purchase when compared to prior generations. Mainly, the
delay in home-ownership seems to be part of a larger trend of delaying
the period of life known as “transition to adulthood”. For example, the
share of 18-34 year-olds who are married with children has also fallen
from 27% in 2000 to 20% in 2015.<br /><br />The study did find one major
correlation between student loans and delayed home-ownership: student
loan debtors who dropped out of college did have much lower rates of home-ownership vs. student loan debtors who graduated from college.<br /><br />Moral
of the story? If you’re going to take out student loans, it’s better
to graduate from college with a degree that leads to a high-paying job.<br /><br />.....<br />*Jason Houle and Lonnie Berger. 2015 <a href="http://static1.1.sqspcdn.com/static/f/1212067/26793076/1452882222110/HouleBerger2015.pdf?token=N4i9y8cUic1Gl6RpIJzemkdLwpg%3D" target="_blank">“Is Student Loan Debt Discouraging Home Buying Among Young Adults?”</a> 89:589-621,<em> </em><em>Social Service Review</em>
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<em>Source: CMPS Institute</em></div>
DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-91930075011632856402023-06-22T05:50:00.000-07:002023-08-01T13:06:32.141-07:00How Much Student Debt is Too Much?<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana, sans-serif;">Student loans have surpassed credit card debt and are now the second
largest source of household debt in the United States… second only to
mortgage debt. Is this leading to a decline in household wealth?
Several recent studies have examined the topic and it seems that the
amount of debt is not as important as the college degree that came with
it.<br /><br />For example, young adults who graduate with degrees in
business, law, and medicine tend to have very high debt burdens.
However, their degrees tend to lead to jobs with very high incomes. <br /><br />On
the other hand, young adults who have either dropped out of college or
who have graduated with degrees in lower-paying fields end up with lower
paying jobs. This would cause even a small amount of student loans to
be burdensome.<br /><br />A <a href="https://cew.georgetown.edu/cew-reports/valueofcollegemajors/" target="_blank">recent study</a>
conducted by Georgetown University found that top paying college majors
earn a staggering $3.4 million more than the lowest paying majors over
the course of a recipient’s career.<br /><br />Moral of the story? Examine the earnings potential of the degree you want before you get into debt to acquire it.
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<span style="font-family: Verdana, sans-serif;"><em>Source: CMPS Institute</em></span></div>
DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-31461857543574480822023-06-06T05:49:00.000-07:002023-08-01T13:07:38.443-07:00What's a College Degree Worth?<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "verdana" , sans-serif;">Top paying college majors earn a whopping $3.4 million dollars more than
the lowest paying majors according to recent stats released by
Georgetown University. <br /><br />Among the winners are college degrees in
STEM (science, technology, engineering, and mathematics), health, and
business. <br /><br />These degrees have average annual wages of $37,000 or more at
the entry level and an average of $65,000 or more annually over the
course of a recipient’s career. <a class="green" href="https://cew.georgetown.edu/cew-reports/valueofcollegemajors/" target="_blank">Click here</a> to view the full report.<br /><br />Contact me if you have any questions or if you'd like to schedule a mortgage planning conversation.
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<span style="font-family: "verdana" , sans-serif;"><i>Source: CMPS Institute</i></span></div>
DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-67590866127024445462023-05-18T05:48:00.000-07:002023-08-01T13:07:57.683-07:00Three Things You Can Do to Better Prepare for College Expenses<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana, sans-serif;">In the last 10 years, students themselves have gone from paying 30% of
college costs, to paying close to 50% of their own college costs. This
has resulted in driving up the outstanding student loans in the US from
$350 billion to a staggering $1.2 trillion over the past 10 years. </span><br />
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<span style="font-family: Verdana, sans-serif;">The
interesting thing is that high-paying jobs are certainly no guarantee
after college, and 11.1% of all student loans were more than 90 days
delinquent in the first quarter of 2015. </span><br />
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<span style="font-family: Verdana, sans-serif;">Here are three things you can
do right now to help your children or grandchildren prepare for the
first major investment of their lives:
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<li><span style="font-family: Verdana, sans-serif;">Engage the student early on so that they start thinking of college
as more of an investment in their future vs. simply another life
experience. Otherwise, it could be one heck of an expensive experience
for them and for you! Talk to them about what it may be like to pay off
$30,000, $50,000 or $100,000 in debt over a 15-20 year time-frame.
Calculate the monthly payments and help them understand that studying
hard to get a scholarship could literally mean saving $500 -
$1,000/month for the next 20 or 30 years! Then, pull out some travel
catalogs and car magazines. Help them visualize all the amazing life
experiences they can buy for $1,000/month. Now, ask them to choose
between THAT and the alternative ways of spending time that doesn't
result in scholarships.<br /> </span></li>
<li><span style="font-family: Verdana, sans-serif;">Start budgeting as soon as possible. <a class="green" href="https://bigfuture.collegeboard.org/pay-for-college/paying-your-share/college-savings-calculator" target="_blank">Click here</a> to
view a great college savings calculator on the College Board website.
This can help you determine how much you need to start saving each
year.<br /></span></li>
<li><span style="font-family: Verdana, sans-serif;">Talk to me about restructuring some of your debt, cash flow, and
home equity while interest rates are still low. You never know what
your options are until you have the conversation.</span></li>
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</span><span style="font-family: Verdana, sans-serif;"><em>Source: CMPS Institute</em></span></div>
DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-82709505984683529412023-04-13T06:16:00.000-07:002023-08-01T13:08:22.496-07:00Two Reasons to Buy vs Rent<div dir="ltr" style="text-align: left;" trbidi="on">
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1: Cost of renting:</h4>
Rents have increased dramatically in
recent years. Vacancy rates are low, and the growth in renter
households is high. This means that landlords have greater pricing
power when setting rents. <br />
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2: Cost of not owning:</h4>
The average rate of house price appreciation over the past 20 years
has been over 3% per year. In the <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/metropolitan-median-area-prices-and-affordability" target="_blank">Click here</a> to view house price trends in your local market past five years, house price
appreciation in many markets for starter homes has been even greater.
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At 3% annual house price appreciation, a $10,000 down payment on a
$200,000 house could grow to $40,000 over a five-year time period. <br />
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That
growth could be money that you would have lost by not owning a home.<br />
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Contact me if you’d like me to run a buy vs. rent analysis for your specific scenario! </div>
DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-65138406836542463982023-04-04T05:57:00.000-07:002023-08-01T13:09:13.382-07:00Timing is Everything… Especially During Retirement<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana, sans-serif;">A lot of discussion about “sequencing of distributions” has been taking
place recently in financial planning circles. “Sequencing of
Distributions” looks at the order in which you take distributions from
your retirement account. This matters because the order in which you
take distributions has a very significant impact on how long your
retirement assets will last.<br /><br />Consider the two examples
illustrated in the chart. Column 1 has the same amount of distributions
scheduled for the next five years, regardless of how the market
performs. Column 2 changes the distributions in years 2, 3 and 4, based
on the performance of the market.<br /><br />A reverse mortgage line of
credit can be used to supplement your income in the years where you take
a reduced distribution from your retirement account. This could
preserve your assets for a longer period of time, and give you more
flexibility as the market fluctuates.<br /><br />Please see a financial
advisor for more details on how to evaluate a better distribution
sequencing strategy for your situation. Please contact me for more
details on how a reverse mortgage could help.
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<span style="font-family: Verdana, sans-serif;"><em>Source: CMPS Institute</em></span></div>
DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-2621675682577147422023-02-16T10:07:00.000-08:002023-08-01T13:11:00.102-07:00If You Can Afford To Rent<div dir="ltr" style="text-align: left;" trbidi="on">
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DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-55281100771548408332018-02-09T08:39:00.002-08:002018-02-09T08:48:04.139-08:00How do the changes to to the Mortgage Interest Deductions impact me? <div dir="ltr" style="text-align: left;" trbidi="on">
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The only type of home mortgage interest that is tax deductible in 2018 is interest on up to $750,000 of <br />
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loan proceeds used to buy, build or improve a qualified home. The $750,000 is aggregate total for both qualified homes(one primary home + one vacation home). For more details, see my article called, “When is Mortgage Interest Tax Deductible.” Here are five ways this change may impact your home loan strategy:</div>
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<li style="color: #666666; font-size: 14px; line-height: 20px; padding-bottom: 10px; text-align: left !important;"><strong style="font-weight: bold;">Debt Consolidation Loans</strong> – the interest on the “cash-out” proceeds or home equity loans used to pay off other debt that was not used for home improvement is no longer tax deductible</li>
<li style="color: #666666; font-size: 14px; line-height: 20px; padding-bottom: 10px; text-align: left !important;"><strong style="font-weight: bold;">Vacation Home Loans</strong> - it may not be a smart idea to use a “cash-out” mortgage or home equity line of credit on your primary home to buy a vacation home. Instead, you may want to consider placing a mortgage on the new vacation home when you buy it so that it can be treated as “acquisition indebtedness” for tax purposes.</li>
<li style="color: #666666; font-size: 14px; line-height: 20px; padding-bottom: 10px; text-align: left !important;"><strong style="font-weight: bold;">Home Improvement Loans</strong> - the interest on a “cash-out” mortgage or home equity lines of credit is generally still deductible if you are using the funds for home improvements. There are certain rules and timelines that need to be followed to make this work.</li>
<li style="color: #666666; font-size: 14px; line-height: 20px; padding-bottom: 10px; text-align: left !important;"><strong style="font-weight: bold;">Refinancing an “Acquisition” Mortgage Closed on or Before December 15, 2017</strong> – there may be no need to worry about losing your tax deduction if you refinance an old loan that was used to buy, build or improve your home. That’s because the interest on your new home loan is generally still tax deductible on balances up to $1mm if the new loan balance is the same as your current loan balance.</li>
<li style="color: #666666; font-size: 14px; line-height: 20px; padding-bottom: 10px; text-align: left !important;"><strong style="font-weight: bold;">Refinancing an “Acquisition” Mortgage Closed After December 15, 2017</strong> – the interest on your new home loan could be deductible on balances up to $750,000 if the loan balance is the same as the old loan balance. If you are increasing your mortgage balance, you may want to use the funds for home improvement to keep your tax deduction on that portion of the loan.</li>
</ul>
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Be sure to check with a CPA for more details about how these changes may impact your specific situation.<br />
<br />
PLEASE NOTE: THIS ARTICLE AND OVERVIEW IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL, TAX, OR FINANCIAL ADVICE. PLEASE CONSULT WITH A QUALIFIED TAX ADVISOR FOR SPECIFIC ADVICE PERTAINING TO YOUR SITUATION. FOR MORE INFORMATION ON ANY OF THESE ITEMS, PLEASE REFERENCE <a href="http://www.irs.gov/publications/p936/" style="color: #1072b7; text-decoration: none;" target="_blank">IRS PUBLICATION 936</a>.</div>
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DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-61234600152555509912018-02-05T05:58:00.000-08:002018-07-09T05:59:14.342-07:00Low Bond Yields Are Causing Problems for Retirees<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Verdana, sans-serif;">Most retirement plans created over the past 30 years have assumed that
government bond yields during retirement would be a lot higher than they
are right now. As illustrated in the chart, the yield on the 10-yr US
Treasury fluctuated between 4% and 8% during most of the 1990s, and
between 2% and 4% over the past 10 years. However, the yield has stayed
below 3% for most of the past two years. Even so, interest rates in
the US are not nearly as low as they are in the rest of the world. <br /><br />In
fact, over 30% of global government bonds had a negative yield
throughout 2017; and approx. 70% of global government bonds had yields
lower than one percent. Even after bond yields started increasing this
year, US bond yields remain below their long-term averages, and it's not
out of the question that they may remain so for an extended period of
time. This low-rate environment has many causes, including a “flight to
quality” in the financial markets and large bond purchases by central
banks across the world. Low bond yields may be the new normal, and many
retirees would do well by revisiting the financial assumptions in their
retirement plans. <br /><br />For example, a $400,000 retirement account
with $30,000 in annual distributions would deplete 20% faster with 2%
bonds yields vs. 4% bond yields. You may be able to use a reverse
mortgage to reduce your expenses or supplement your income during
retirement. This could allow you to take fewer distributions from your
retirement account. This would preserve your assets for a longer period
of time, and help you to account for today's lower bond yields. <br /><br />Please
see a financial advisor for more details on how low bond yields may be
impacting your retirement plan. Please contact me for more details on
how a reverse mortgage could help.
</span><br />
<span style="font-family: Verdana, sans-serif;"><em>Source: CMPS Institute</em></span></div>
DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-38431509338339605572018-01-26T17:01:00.000-08:002018-02-12T17:04:53.253-08:00<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: Verdana, sans-serif;">While it seems simple enough, it is important to very carefully ask and answer these three questions when you invest in real estate:</span><br />
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</span>
<li><span style="font-family: "verdana" , sans-serif;"><span style="font-family: Verdana, sans-serif;"><strong>How can I increase my rate of return?</strong> The cornerstone of any smart </span><div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmyjFsYTSKOtSb4T78l_QQx50Lclq7TiSsPXFgxmZvhe49EwWjwieETf_0v5gBIclwFZ1WXLvgiLpqQ0jmPtkn-YSnwN149S7DRFXNtv772pEKnF8Av6LWgpvny20KwSWu_H6Kbf8aq2U/s1600/three+questions.png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><span style="font-family: Verdana, sans-serif;"><img border="0" data-original-height="483" data-original-width="724" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmyjFsYTSKOtSb4T78l_QQx50Lclq7TiSsPXFgxmZvhe49EwWjwieETf_0v5gBIclwFZ1WXLvgiLpqQ0jmPtkn-YSnwN149S7DRFXNtv772pEKnF8Av6LWgpvny20KwSWu_H6Kbf8aq2U/s320/three+questions.png" width="320" /></span></a></div>
<span style="font-family: Verdana, sans-serif;">
investment strategy is to calculate your rate of return. With real estate this is done by running the numbers using an internal rate of return (IRR) formula that takes into account: </span></span><ul><span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Present Value (PV) - what am I paying out of pocket to get into this investment?</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Term (N) - what's my timeline and how long am I going to hold this investment?</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Periodic Cash Flow (PMT) - what's my monthly cash flow?</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Future Value (FV) - what are my net proceeds (after expenses) when I sell the investment?</span></li>
<span style="font-family: Verdana, sans-serif;">
</span></ul>
<span style="font-family: Verdana, sans-serif;">
</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: "verdana" , sans-serif;"><span style="font-family: Verdana, sans-serif;"><strong>How does my rate of return with real estate compare with other investment opportunities? </strong> When calculating your rate of return, make sure to account for: </span></span><ul><span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Carrying costs (mortgage, taxes, insurance, maintenance, etc.)</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Your time spent managing the property</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Vacancy loss if you don't find a tenant</span></li>
<span style="font-family: Verdana, sans-serif;">
</span></ul>
<span style="font-family: Verdana, sans-serif;">
</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: "verdana" , sans-serif;"><span style="font-family: Verdana, sans-serif;"><strong>How can I reduce my risk?</strong> You may want to consider these strategies to reduce your investment risk: </span></span><ul><span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Increase your liability insurance in case something goes wrong</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Consider a rent-to-own strategy where you find a tenant before you find a property</span></li>
<span style="font-family: Verdana, sans-serif;">
</span>
<li><span style="font-family: Verdana, sans-serif;">Consider mortgage strategies that result in more cash flow and/or better liquidity </span></li>
<span style="font-family: Verdana, sans-serif;">
</span></ul>
<span style="font-family: Verdana, sans-serif;">
</span></li>
<span style="font-family: Verdana, sans-serif;">
</span></ol>
<span style="font-family: Verdana, sans-serif;">Contact me so we can get started on helping you answer these questions!</span></div>
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DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0tag:blogger.com,1999:blog-4429577657457770174.post-54457453287805501602018-01-01T06:00:00.000-08:002018-07-09T06:00:20.283-07:00Three Questions to Ask Yourself for a Happier Retirement<div dir="ltr" style="text-align: left;" trbidi="on">
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<h5>
<span style="font-family: Arial, Helvetica, sans-serif;">#1: What does retirement mean to me?</span></h5>
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span style="font-family: Arial, Helvetica, sans-serif;">Many people think of retirement as a time in your life where you can
work if you want to, but not because you have to. In other words, how
would you feel if you could work for fun and/or pursue your passions
without worrying about money? This requires financial independence, or
having enough money to:</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><ul>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Cover your needs and basic wants</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">After taxes</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">After inflation</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">For some period of time (usually you and your beloved's lifetime)</span></li>
</ul>
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span style="font-family: Arial, Helvetica, sans-serif;">The amount of money necessary for financial independence is called
"Critical Capital". This is a pile of money that can sustain all your
retirement expenses with inflation and after taxes for the requisite
time period. This may be in an assortment of piles of money such as
funds in your 401(k), Roth IRAs, and taxable money. Retirement could
mean reaching a point where you have enough Critical Capital to spend
your money making a life versus being forced to spend your life making
money. Now that's exciting!</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><div class="check-mark table table-hover table-striped responsive dataTable">
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><h5>
<span style="font-family: Arial, Helvetica, sans-serif;">#2: What is the role of mortgage planning?</span></h5>
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span style="font-family: Arial, Helvetica, sans-serif;">Your mortgage is most likely your single largest debt, and your house
is most likely your single largest asset. Your mortgage and home equity
situation impact your:</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><ul class="check-mark">
<li><span style="font-family: Arial, Helvetica, sans-serif;">Cash flow</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Tax deductions (or lack thereof)</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Net worth and wealth position</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Liquidity (access to your money)</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Estate and legacy planning</span></li>
</ul>
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span style="font-family: Arial, Helvetica, sans-serif;">It's important to ask yourself whether your mortgage or real estate
equity strategy is helping or hurting your chances of acquiring the
right amount of Critical Capital. Does it make more sense to use a
smaller mortgage and invest more cash flow into your Critical Capital
fund? Does it make more sense to use a bigger mortgage and invest more
upfront cash into your Critical Capital fund? What about using or
planning to use reverse mortgage now or at some point in the future?
Mortgage planning asks and answers all these questions to help you avoid
missing your mark and not having enough Critical Capital. Your
mortgage, housing, and cash flow strategy play a large role in helping
you achieve financial independence.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">
<img alt="" class="“float-right”" src="http://www.relationshipplanner.com/articleimages/428/savings.jpg" width="400" />
</span><h5>
<span style="font-family: Arial, Helvetica, sans-serif;">#3: How Will I Get Enough Critical Capital?</span></h5>
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span style="font-family: Arial, Helvetica, sans-serif;">Remember, the amount of money necessary for financial independence is
called "Critical Capital". There are three specific steps that I use to
help you acquire enough Critical Capital for financial independence:</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><ul>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Calculate Critical Capital — how much do you need?</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Determine the future value of how much you have already saved — what will your current investments be worth in the future?</span></li>
<li><span style="font-family: Arial, Helvetica, sans-serif;">Determine how much you still need to save — how can you change your
cash flow or real estate equity situation in order to make up for the
shortfall?</span></li>
</ul>
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span style="font-family: Arial, Helvetica, sans-serif;">As a mortgage professional, I work as a team with your CPA, CFP® and
other financial advisors to help you determine how much cash flow you
need during retirement and the best way to generate that income. I can
also refer you to a financial planner if you don't already have one.
Either way, give me a call or send me an email to schedule a time to
discuss your options in further detail.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span style="font-family: Arial, Helvetica, sans-serif;">PLEASE NOTE: THIS ARTICLE AND OVERVIEW IS PROVIDED FOR INFORMATIONAL
PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL, TAX, OR FINANCIAL ADVICE.
PLEASE CONSULT WITH A QUALIFIED TAX AND INVESTMENT ADVISOR FOR SPECIFIC
ADVICE PERTAINING TO YOUR SITUATION.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">
</span><span style="font-family: Arial, Helvetica, sans-serif;"><em>Source: CMPS Institute</em></span><br />
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DannyLSmithhttp://www.blogger.com/profile/06118088720693042075noreply@blogger.com0