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Health Care Retirement Costs For Couples Top $220,000 – Imagine A Real Estate Strategy To Help Pay For That

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Planning For Retirement? Did You Know That The Average Couple Needs $220,000 For Health Care After 65?  Real Estate Investment Strategies Which Can Help You Meet Your Retirement Obligations And Allow You Benefits You Haven’t Thought Of Are Available For You

Wow, That’s A Lot Of Money

Research and recent data show that in order to be comfortable in retirement a retiree couple must figure that they will be spending an average of $220,000 during their retirement on health care costs.  Importantly, this amount does not include nursing home costs, or other long-term care expenditures.  If the average retirement lasts 25 years that is approximately $8,800 per year for two people – now that doesn’t sound as bad, correct?  No matter what the real number is it is imperative that people plan for these costs and expenses.

logo-mmHealth Care Costs Have Leveled Off Recently

Health care costs for retirees increased an average of six percent for nearly a decade until 2010 when it crested and began to level off.  Lower-than-expected Medicare spending, continued long-term savings on prescription drugs because of the gradual closure of Medicare Part D’s, and an increasingly cautious, and more selective, health-care consumer have led to the stabilization of costs.  Moreover, Obamacare, whether you are a fan or not, has increased awareness because of the notoriety and media coverage which has contributed to the flat pricing.

You Need To Plan Now – Every Day Another Opportunity Is Lost

Planning for retirement is a long-term process which should begin today if you haven’t already mapped it out.  Opening a health savings account (HSA), if possible, is another way retirees can help buffer the large monetary burden retirement imposes.  Some people will not have the chance to save this type of money but those who do should be packing it away right now.  Every day that goes by is another day that you could have done something.

Legal & Encouraged Capital Gains Avoidance Strategies

There are various strategies for helping people save for retirement expenses including tradition stocks, bonds, currencies, precious metals, 401K plans, and IRAs.  However, a strategy based on real estate investment can also be employed.  Many people are not aware that there are tax friendly real estate strategies which are designed to allow people to build equity and wealth while other people help you achieve those goals.

 

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One OPM Strategy – Other People’s Money

The basic (OPM) strategy is to purchase an income or investment property, as early as possible, wherein another person or entity is paying down the debt on the asset and increasing your equity and wealth.  This strategy, and variations of it, can be employed to take advantage of the Internal Revenue Code I.R.C. Another example is transforming your personal residence into an income producing property (managed by a professional property manager), and selling it after it has “cured” into a rental property, which effectively removes the equity from capital gains exposure and allows you to reinvest the entire asset amount into a like-kind commercial property.  The commercial property will benefit you because the commercial tenants will pay for 100% of the costs and expenses of your new asset.  The income kicking off from the new asset will be available to you to supplement your retirement income and help pay for your expenses.  Another beautiful thing about this strategy is that you will not have to pay capital gains taxes on the sale of the asset, but will be able to enjoy the fruits of the rental income which are taxed at ordinary income tax rates.  Yet another nice feature of this strategy is that the asset or building, if your trust is set up properly, can be left to your family and allow them to continue to benefit from the asset into the future. Where will you live while your personal residence is being transformed into a rental property?  Who knows, but the income produced by the renting of your residence can be used for you to rent another residence while your former personal residence is being transformed.  It actually works in concert and after a year or so you now have an income producing property than can be sold, and can be 1031 exchanged into a commercial building which will provide increased benefits for you and your family for many years to come.

Contact Me So We Can Talk About Some Strategies

To hear more about OPM real estate strategies, as there are many, contact me so I can share with you many of my ideas to help fund your retirement so you can live in comfort and peace.

About Shelly Roberson

Shelly Roberson has 25 years of experience; 600+ closed transactions; UC Berkeley grad; Shelly has worked in the same Palo Alto office for 23 years; She brings a wealth of skill, experience and professionalism; Shelly is incredibly detail oriented and a savvy negotiator.

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