Over 30? Questions You Should Ask Yourself

Over 30? Questions You Should Ask Yourself


Could you retire comfortably on $1,250? Unfortunately, Social Security statistics show that Social Security provides 89% of the majority of retirement income with the average income only $13,500 per year. Only 2% will be self-sustaining. 23% will still be working, 30% will be partially dependent on charity, and the remaining 45% will be partially dependent on relatives.

Should I depend on Social Security to fund the majority of my retirement? I was asked that question the other day. As a REALTOR® who helps people build wealth through land banking, I had to answer emphatically “No”! The prognosis is bleak for the social security fund. On the front page of our semi-annual statement it clearly states:
Ø 2017 – The agency will begin paying out more in benefits than it collects in revenue.
Ø 2027 – The agency will have to tap the principal in its “trust fund” to meet its monthly obligations.
Ø 2041 – The trust fund will be exhausted, at which point the agency will be able to pay only about 75% of promised benefits.
Need I say more!
How much would I need to be self-sustaining in my retirement?
Everyone should take a hard look at what they want out of retirement, whether it is time with the grandkids, travel, and/or the pursuit of all those fun hobbies and sports you never had time for. Then add in all the basics: food, lodging, medical expenses, transportation, etc. Try to calculate your life span. You do not want to out live your money! From there you should be able to come up with an estimate. Once you have a monthly figure the following numbers should help you estimate the funds you would need to accumulate by retirement
Assuming a 4% return annually on cash
Ø $1,200,000 would return an average net monthly income of $3,000
Ø $2,000,000 would return an average net monthly income of $5,000
Ø $2,800,000 would return an average net monthly income of $7,000
Ø $4,000,000 would return an average net monthly income of $10,000
Of course you also need to allow for inflation, see below for help to calculate this.

What will my dollars saved today be worth when I am ready to retire? We have all heard of inflation, it erodes the value of our dollar everyday. The sad mostly unknown fact is that the annual inflation rate calculated by the government does not include food and energy. If they were to include those items the inflation rate would average two to three points higher. This is what to expect from inflation on the buying power of your dollars. Remember to include the extra points for food and energy, both essential to survival, don’t you think?
Ø An inflation of 3% doubles the cost of your living expenses in 23 years.
Ø An inflation of 5% doubles the cost of your living expenses in 15 years.

How long will it take my money to grow?
Most people don’t realize that growth is the key to investment potential. Everyone should look at how much they have already put aside, how much they are currently able to contribute each year and how long before they retire. Then they need to take a good long look at the growth rate of their current investments. The growth rate makes all the difference. If you are averaging10% growth a year, it will take seven years for your money to double. However, if your growth rate is 20% it only takes 3.6 years for your money to double. Growth is the key to investment potential, in this case the old adage “time is money” does not apply---“time is money lost” is more appropriate.

Should I make some changes in my retirement plan?
At this point you are either patting yourself on the back for already have planned and built a retirement portfolio or you are scared to death. Either way, speaking to professionals and examining thoroughly all the investment options in this changing market is always the best choice.

Utilizing federal tax rule 408B and rolling your IRAS, ROTHs or 401Ks into self-directed accounts and buying carefully selected California Real Estate is one of those investment options. As a real estate broker representing the land portfolio of the 34 year old company, Ace Capital Group, I help individuals utilize a better growth vehicle for long term appreciation. I would love to meet with you, review your current situation and give you all the details of what has been working extremely well for our over 10,000 clients. Please do not hesitate to email or call me with questions. To examine these issues in depth please set your own private appointment. I am available at your convenience.

Debra Madore, REALTOR ®
Ace Capital Group
DMadore@AceCapGroup.com
Cell 951 347 3602
Fax 951 734 7152