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Life Settlement Advisors
September 23, 2019

 

Planning for retirement is sometimes challenging because you have to save for so long without seeing any tangible return. Some of the investments on this list represent the opportunity to purchase property that makes your retirement planning part of your life now. They also might be options to invest and get cash during retirement, even if you didn’t buy them a long time ago. One or more of these five non-traditional retirement investments could be a money-maker for you, if you’re the kind of person who is open to high risk and high reward.

Real Estate and Rental Properties for Retirement Income

Real estate is certainly a traditional method of investment, but many don’t consider it a secure or liquid enough approach for retirement. More often, those in retirement consider downsizing a home. But 50% of Airbnb hosts make $500 a month. If owners can acquire properties in desirable cities and countries, or even give up their own home a few weekends a month, real estate can represent not only an investment option but an income opportunity.

Wine Investing Returns and Risks

Wine investing requires learning a little something about wine, and some advance preparation to store the wine. If you don’t take those steps, this investment can quickly turn into a loss. However, you don’t have to be an expert in vineyards or growing conditions. The starting point is usually around $10,000 for a case, though depending on the vintage, that could also get you just one bottle. That investment can definitely pay off, like the single bottle of Cabernet Sauvignon that sold for $350,000 at auction.

Collecting Cars to Fund Retirement

The first thing most people will tell you about buying a car is that the value goes down the second you drive it off the lot. But classic or collectible cars are a different story altogether. Value is based on how rare the car is, along with the condition, make, model, and other factors. However, a classic car is not an investment to make without interest and passion. Restoring and maintaining the vehicle will be an expense over time, along with storing it. Plus, those who do make money on cars say that just investing in one isn’t enough.

Art Investing For Resale

Investing in art is nothing anyone can guarantee, but if you spot the right pieces, your money can grow exponentially. One piece by Jean Michel Basquiat sold for $17,680,936 in 2017 after being purchased for $136,367 in 1992.  While this market represents a huge opportunity to grow money quickly, investors must also remember it is a community of people to get to know. You can start with online resources but will eventually need to visit galleries and make connections. This will let you find pieces you like that also may accrue value.

Invest in Yourself in Retirement

The last strange retirement investment that just might pay off is in yourself. Retirement is a time we look forward to because it’s an opportunity to explore passions we set to the side for a career. For many, investing and training in those passions leads to a second professional existence. Whether it’s an online store that supplements your monthly outcome, a role in the gig economy, or just a better sense of self-fulfillment, the returns and reward of investing in yourself are always obvious. If you do want to start an online hobby shop or try entering a new role, just make sure to do your research before diving in.

These five investments are all more risky than a 401(k) or Roth IRA, or even a life insurance policy or other investment. But they also have appeals that make them good fits for certain types of people. When you’re trying to make this kind of strange investment, every extra dollar counts. Did you know you can sell all or a portion of a life insurance policy in a life settlement for more than the surrender value, even term insurance? If you have policies you no longer want or need, avoid the premiums and gain back more of your invested dollars through a life settlement. Then, fund your goals. If you want to see if a life settlement could be right for you, visit the Life Settlement Advisors calculator to see if you qualify.

For information on Life Settlement Advisors, click HERE

Website:  https://www.lsa-llc.com/

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Andy Landis
December 27, 2016

 

Avoid retirement surprises by understanding the Social Security computation. Let’s go back to school to study the math behind your Social Security. A little understanding of the numbers goes a long way to avoiding retirement surprises and shortfalls. Like other pension systems, your Social Security is based on three factors: eligibility, earnings, and age. SSA puts its own twist on each factor. Math 101: Compute your eligibility To be eligible for Social Security retirement payments, you need 40 Work Credits (WCs). You can earn up to 4 WCs per year, so they’re sometimes called quarters. In 2015 you earn one WC for each $1220 you earn anytime in the year. So if you earn 4 x $1220, or $4880 in 2015, you get all 4 WCs for the year. (Only work where you pay Social Security taxes counts. The cost per WC generally increases annually with inflation.) 40 WCs ÷ 4 WCs per year = 10 years of part-time work needed for a retirement payment. Math 102: Compute your average earnings The second factor is your lifetime average earnings. Many pensions are computed on your best 5 years of work. Not Social Security. It’s based on your best 35 years of work. Here’s how: • SSA records each year’s earnings subject to Social Security taxes. • When you hit 62, every year is multiplied by an inflation factor to make it more comparable to today’s pay level. • The top 35 years of inflated earnings are selected and averaged together. The years need not be contiguous (in a row or block). That 35-year average determines your Social Security payment—a higher average means higher Social Security. 35 years are used, even if you don’t have 35 years of work. Missing years post as zeros, reducing your 35-year average. A little math hocus-pocus (see http://www.socialsecurity.gov/OACT/COLA/piaformula.html) converts your 35-year average into your Social Security payment. Avoid two mistakes here. • First, high late-career earnings don’t always mean high Social Security, if you had low earnings earlier. It’s a lifetime average. • Second, retiring a few years early after lifelong work won’t drastically reduce your Social Security. A few zeros have little impact on your 35-year average. Math 103: Compute your age The third factor is your age when you start payments. That’s based on your Full Retirement Age (FRA). Your FRA is between 65 and 67, determined by your birth year. (See http://www.socialsecurity.gov/OACT/ProgData/nra.html) Whatever your FRA, you can start payments any month from 62 to 70. Start payments at your FRA and you get a 100% payment. Start payments earlier and you get a small reduction for each reduction month. For example, if your FRA is 66, and payments start at 62, your 48 reduction months yield a 75% payment. Start payments after your FRA and you get a raise for each month’s Delayed Retirement Credit (DRC). For example, if your FRA is 66 and payments start at 70, the 48 DRCs yield a 132% payment. Age factors top out at 70; don’t delay filing after that. An SSA calculator at http://www.socialsecurity.gov/OACT/quickcalc/early_late.html#calculator figures the percentage for any month from 62-70. More schooling • Get SSA’s estimate of your future payments at www.ssa.gov/myaccount. • Math nerds: See a sample computation dissected by SSA at http://www.socialsecurity.gov/OACT/ProgData/retirebenefit1.html or in my book, available at http://andylandis.biz/index_files/Page403.htm. • Compute your own estimate at www.ssa.gov/pubs/index.html. Type “your retirement” in the lower search box (under the “Publications” headline), and select your birth year in the “PDF” button. It all adds up. So as always, keep on planning.