How to Choose the Retirement Housing Option That’s Right for You

If you’re approaching retirement and beginning to give some thought to “trading down” to a smaller place, you’ve probably realized that there are many factors to consider before making the move…  read the full text of this article


Legal Tools for Managing Your Affairs and Property Before and After Death

How to Choose the Retirement Housing Option That’s Right for You

If you’re approaching retirement and beginning to give some thought to “trading down” to a smaller place, you’ve probably realized that there are many factors to consider before making the move…

Decide What’s Important

Ask yourself a lot of questions! These might include:

• Do I want to retain the independence (and responsibilities) of a single-family home?
• Do I want to be free of major maintenance chores?
• Do I occasionally need some help with daily activities?
• Do I want to be surrounded by others as part of a community?

Besides the practicalities of deciding where and how you want to live, there are mental preparations for this major life change that are just as important.

Make Post-Retirement Plans

Beverly Park, M.A., a counselor and life coach in Tustin, California, says it’s essential to contemplate your post-retirement needs and plans. “As your needs change, it’s important to work with your financial planner, insurance agent, and extended family members so you can have security and peace of mind for the future…Find a good balance between quiet, peaceful time, and activities to stay healthy and young,” Park advises.

Study the Choices

The next step is to review housing options. Again, remember to consider both your current and possible future needs. These are some of the alternatives.

• Home modifications – if you’ve decided that you want to stay where you are, then a variety of changes may be made within and to your existing home to make it easier and safer for you to remain there.
• “Downsized” single-family home – you may determine that a smaller house and property best suit your needs. For long-term ease and safety, look for a home with the entire living area on one floor.
• Condominium, patio home, or townhouse – if you want to live independently but with freedom from major maintenance chores (e.g., lawn care, snow removal—all taken care of by a homeowners association to which you pay dues), then this type of housing may be ideal.
• Retirement community – these are usually apartment buildings for seniors who are able to live independently. Generally available are social and recreational activities, a central dining room, and housekeeping.
• Assisted living – this is an excellent option for seniors who need some help in carrying out their daily activities. Personal care, support services, individual apartment-style living, group dining, and some health care services are available.
• Continuing care retirement community (CCRC) – in a CCRC, you may live independently in your own apartment or cottage. As your needs change, you can move to the community’s assisted-living facility. A skilled nursing facility is also located within the community.

Let Me Help You

The variety of considerations can make it difficult to determine exactly what housing option is best for you. Why not consult with a Seniors Real Estate Specialist (SRES) for help? As an SRES, I specialize in the real estate needs of mature Americans and am uniquely qualified to help you through this process. You can then approach this major life change with confidence, knowing that you’ve made the best decision for you.

For more information about how to choose the retirement housing option that’s right for you, click on the links below:

www.aarp.org

www.hud.gov/groups/seniors.cfm

www.seniors-site.com/housingm/support.html

Legal Tools for Managing Your Affairs and Property Before and After Death

A variety of legal instruments can be utilized to meet your wishes about the management of your health, your affairs, and/or the distribution of your property should you become incapacitated or die…

The following are brief descriptions of some of these legal tools.

• Advance Directive

An advance directive is a legal document, prepared in advance, that tells your physician the kind(s) of treatment you would or would not want if you develop a terminal illness or become permanently unconscious.

• Living Will

A living will is an advance directive that takes effect only if you have six months or less to live.

• Do Not Resuscitate order (DNR)

A Do Not Resuscitate (DNR) order is an advance directive that requests that cardiopulmonary resuscitation (CPR) not be performed if your heart or breathing stops.

• Advance Health Care Directive

An advance health care directive allows you to name someone to make health care decisions for you if you’re unable to make them yourself.

• Durable Power of Attorney

A durable power of attorney is a directive that designates someone who will handle financial matters for you if you’re unable to do so.

• Will

A will is a legally binding document that states how all your property is to be distributed at your death.

Probate

In general, when a person dies, assets that were held in his or her name alone must be distributed through probate. Probate is the process by which legal title to property is transferred from the deceased person’s estate.

Why Avoid Probate?

Because probate can be time-consuming and expensive, people often arrange their assets so that probate can be avoided. As examples, jointly owned property, life insurance proceeds, retirement accounts, and annuities pass to the surviving joint owner or to the named beneficiaries without the need for probate.

Similarly, with bank accounts, bonds, and securities, a “pay-on-death” beneficiary can be designated so that when you die, these assets pass automatically to the person(s) you’ve designated.

Living Trusts

A living trust, legally termed a revocable inter vivos trust, can be used to transfer assets after death without the need to go through the slow probate process. “Revocable” means that you can change it during your lifetime; “inter vivos” means that you created it while you were alive.

Because use of the courts is avoided, trusts allow for a more private distribution of assets than do wills. That’s because, while the terms of a will become public, the terms of a living trust do not. A living trust may also have tax advantages.

Even with a living trust, however, you still need a will that provides for distribution of property you may have acquired after you created the trust or that you never placed in the trust.

Consult a Professional

You should consult with an attorney for more detailed information and to help you determine which of these instruments may be of interest and benefit to you. As a Seniors Real Estate Specialist (SRES), I can refer you to attorneys who can assist you with your planning needs.

For more information about legal tools for managing your affairs and property before and after death, click on the following links:

www.aarp.org (legal issues)

www.legal-database.com (living trusts, probate, estate law, wills)

Real Estate and Your Estate

Thoughtful money management now can help you achieve your goals of 1) a comfortable retirement and 2) preservation of your assets while minimizing taxes for both you and your heirs. You may not be aware of the ways in which real estate investment can enhance your financial position.Here are some strategies to consider. …<INSERT bookmark, “For complete information, click here”, print full text of article below>

Investment in Real Estate

Real estate investing can be advantageous in a number of ways.These include:

Rental Properties

• Cash flow – if you invest in rental real estate, the difference between rents you collect and your expenses is your cash flow from the investment.
• Equity – just as when you purchase your own home, your equity in rental property increases over time as you pay off your mortgage.
• Tax savings – because the government allows you to depreciate residential rental property, enabling you to deduct the annual depreciation amount as an operating expense, this deduction, combined with all your other deductions, may result in a tax refund, even if you’re receiving cash flow from the property(ies).
• Appreciation – properties usually appreciate in value each year, depending upon supply, demand, and the rate of inflation.

1031 Tax-Deferred Exchanges

Another advantage of owning a rental property may be realized when you sell it.If you sell an investment property (not your primary residence) and buy a “like-kind” property within 180 days, Federal and State capital gains taxes on your sale proceeds are deferred.This means that the entire gain on your sale may be re-invested.This is called a “1031 tax-deferred exchange” because it’s detailed under Section 1031 of the Internal Revenue Code.

Capital Gains Treatment – Primary Residence

Under the current tax rules, you can sell a principal residence once every two years and exclude up to $250,000 (or $500,000 for a married couple) of the gain from taxes. As long as you reside in any subsequent homes for the minimum two years, you can exclude the same amounts from capital gains taxes when you sell that principal residence.

Real Estate Investment Trust (REIT)

A Real Estate Investment Trust, or REIT (pronounced “reet”), combines the capital of many investors for the purpose of acquiring or financing various kinds of real estate, including offices, hotels, shopping centers, and apartment buildings.REITs generally don’t pay Federal corporate income tax and often aren’t required to pay state income tax.They must invest at least 75% of their assets in real estate and must pay out 95% of their income as dividends, which can be 10% or more.

A REIT is managed like a mutual fund, with a professional manager and diversification in many types of properties, and is usually traded on major stock exchanges.

Think You Don’t Have Investment Funds?

If, like many of us, you just don’t have the cash left over from your everyday expenses to invest in real estate, other sources of funds may be at your fingertips.Some of these include:

• Roth Individual Retirement Account (IRA) – with a Roth IRA, distributions may be taken at any time, tax-free and without penalty.
• 401(k)/403(b) Plan – if you participate in an employer-sponsored deferred compensation retirement savings plan, you may make withdrawals after age 59 ˝ without penalty; such withdrawals are taxed as ordinary income.
• Reverse Mortgages – designed for homeowners age 62 and above, a reverse mortgage allows you to receive cash advances from the equity in your home without the need for repayment as long as you and/or any co-owner live in the home.The lender must be repaid when you sell the home, leave the home permanently, or die.

For more information on real estate investing for seniors, click on the following links:

www.fool.com (real estate investment, Real Estate Investment Trusts, capital gains)

www.aarp.org (reverse mortgages)

Let’s review real estate investing as a strategy for your future financial security.I can also help you find the appropriate professionals to advise you on how to manage your estate wisely. As a certified Seniors Real Estate Specialist (SRES), I’m part of a network of competent professionals, knowledgeable about the unique needs of mature Americans, who are ready to work with you.

What is a Seniors Real Estate Specialist (SRES) and How Can I Help You?

It makes sense that the real estate issues of people age 55 and over are not the same as the concerns of home buyers and sellers in their child-rearing years.It may not be something you’ve thought about, but I have!That’s why I’ve earned the Seniors Real Estate Specialist (SRES) credential…

The SRES program was created in 1998 to develop a nationwide network of real estate agents who specialize in the unique real estate needs of maturing Americans.By completing the certification program of the Senior Advantage Real Estate Council (SAREC), I’ve acquired the knowledge, experience and expertise to help you make the right real estate decisions for you – ones you can live with, perhaps for the rest of your life.

Another advantage to working with me is that, if your circumstances require the expertise of specific types of professionals – attorneys, accountants, bankers or financial planners – I’ve developed a network of associates in these fields and can refer you to specialists for appropriate advice.

And because of my focus, as an SRES, on your needs, I’ve made it my goal to provide you with easy access to a variety of helpful information, right here at my web site.For example, I’m currently preparing a collection of articles that will address specific issues of interest to you.These will discuss the following topics:

• Making the move – how to decide what living situation is best for you
• Reverse mortgage – is it a good choice for you?
• 1031 tax-deferred exchange – how it can work to your financial advantage
• Legal instruments and issues – wills, trusts, power of attorney, probate
• Estate planning – financing your retirement while avoiding/minimizing taxes

In addition, I’m compiling a collection of links to other web sites that can provide you with access to detailed information if you’d like to learn more about a particular subject.These will include links to sites devoted to Oklahoma City-area retirement communities; Social Security and Medicare; and other sites geared specifically toward mature Americans and the issues of special interest to you.

So if you’re 55 or over and are looking for important facts related to buying, selling, relocating, or refinancing, then you’ve come to the right place!Please bookmark my site

and check back frequently for a wealth of useful information prepared specifically with your needs and concerns in mind.

For more information about the Seniors Real Estate Specialist (SRES) designation, click here: www.seniorsrealestate.com