Speed up your
A solution for those that have been slacking
ITIPress.org - Soraya Nasrallah
Are you feeling as if your life is financially stuck in a land of
depressive small figures? You keep working and making an income, but it
keeps running away from you not to find its way into your savings or
retirement accounts. You know that you want to achieve success financially
and emotionally; after all one affects the other. For those in need of
speeding up their retirement and who own a home that has substantially
moved up in value, it is imperative that you look into the following.
Look at your
financial situation (what you have vs. what you owe) – cut down
Make up your mind
that you are willing to make a change in your life TODAY.
If you need to get a
better paying job, then refurbish your resume, personal look and
attitude toward life and GO FOR IT!
Find out how much
your home is worth in the market today. Take note that nobody knows for
how long you will be able to sell your home at these high prices.
Ok, so you are wondering what your home has to do with anything! Here is
the deal. And before you run out and make a decision, I suggest you
consult your financial advisor and your realtor. Check out
www.fidelity.com. This article will be short, but it may give you one
of the best solutions for speeding up your retirement. I will present my
idea to you in number format.
Jot down what your
home is now worth.
Make up your mind
that you are willing to downgrade. In other words; you need to purchase
a smaller place in an area you like or get a similar place in a less
expensive are. Have your realtor help you out with this. The main goal
here is to instantly create a large enough profit after selling your
current home and then purchasing a new one. Note: Make sure your
new monthly payments are less than before. What is the new total of your
Principal, Interest, Taxes, Insurance and
Association fee, if any? Remember the “formula” PITIA
Set up an investment
pie where a set amount of money will be allocated for specific purposes
based on the PROFIT you gained.
Place the largest
part of your profit into a fixed income no-load annuity where you will
receive a set amount of money guaranteed on a monthly basis for the rest
of your life!
are subject to the claims paying ability of the issuing insurance
income annuity is a financial product that you buy with a single lump sum
of your savings. Like Social Security and company pensions. It provides
you with a regular stream of income payments that continue for the rest of
your life, or if you prefer, for a specific period of time. Given that
it's the only product you can buy that , an income annuity can be an important component of
an effective retirement income plan. – Extracted from
www.Fidelity.com Fixed Annuity
Remember that rates are still low on the 30 year mortgages at around
www.bankrate.com . This offers you the opportunity to obtain a loan at
a fairly good rate!
Profit! Take your profit and invest it in you, your emergency fund, Your
retirement and more real estate; which can be used for rental income
Sample Case Study:
You purchased a three room home that is now worth $350,000. You have
$100,000 left to pay on your mortgage. Your realtor helped you shop around
for a new home based on the idea of having a minimum of $100,000 in
profit. You decide to downgrade to a somewhat large one bedroom apartment
in a nice area because it will only cost you $150,000. After placing a
down payment of $50M and mortgaging the rest, you find out that after all
expenses you end up with approximately $190,000. From this Profit you
create your investment pie. Remember that the profit from the sale of a
home is tax free up to a certain amount depending on your filing status
(single, married, etc.) Here is some info from the
www.irs.gov site. For more tax details, consult your tax advisor.
If you meet
the ownership and use tests, you will generally only need to report the
sale of your home if your gain is more than $250,000 ($500,000 if married
filing a joint return). This means that during the 5-year period ending on
the date of the sale, you must have:
Owned the home for
at least 2 years (the ownership test), and
Lived in the home
as your main home for at least 2 years (the use test).
owned and lived in the property as your main home for less than 2 years,
you may still be able to claim an exclusion in some cases. The maximum
amount you can exclude will be reduced. If you are required or choose to
report a gain, it is reported on
Form 1040, Schedule D (PDF),
Capital Gains and Losses.
Send your questions to
idea is never given to you without you being given the power to make it
reality." - Richard Bach, Author