Retirement Woes

I had a conversation the other day that got me thinking about retirement (not from bodybuilding lol - I'm talking about real-life retirement). Someone very close to me, over the course of the past year, has lost over 50% of their retirement account due to the current economic crisis. Now while that would hurt (a lot!) for someone my age, I can't even imagine what it must feel like for someone within 5 years of retirement. Think about that. You're getting ready to set sail for the Golden Years of your life, when all of a sudden, you no longer are be able to support yourself as initially intended. This means (1.) either you work for several more years to try and replenish your savings account to the best of your ability, or (2.) you severely cut back on your quality of living. Neither option really sounds very appealing to me.

I've already started a Roth IRA, but I really haven't put much thought into what I was going to do with it until now. Stocks, mutual funds, CDs...frankly I don't have much faith in any of them due to their volatility or they offer such pathetic returns it's not even worth considering. Well after quite a bit of research, I think I might have a better solution...

It's called a self-directed IRA. And I'm talking about TRULY self-directed IRAs - not these 'self-directed' IRAs that only allow certain investments. With these financial instruments you're able to invest in everything from real estate, tax liens, tax certificates, make loans (and therefore collect interest and points), and everything else a normal IRA can invest in.

My personal plan is to eventually use my Roth IRA to lend out money to real estate investors at 10-15% interest and charge points. I can secure my money by having a mortgage on the property so if something happens, at least I'm somewhat protected. Sure seems to be a better option than the stock market to me.

Do yourself a favor - look into it yourself and educate yourself as to your options. Most of you reading this still have plenty of time to plan for retirement. Don't put it off too long though! The company that I've been considering due to their reputation is Equity Trust (www.trustetc.com), however I know there are other good companies out there as well.

Go to their site - they have tons of free info. With Equity Trust there is a small set up fee ($50) and a yearly maintenance fee, so if you just plan on letting your money sit there it's probably not worth it. However, if you plan on actively investing (either on your own or with others), it's probably worth considering. The woman that I've been dealing with is Kari Robbins (k.robbins@trustetc.com). If any of you end up signing up she agreed to waive the $50 set up fee (I told her that we'd give them good PR :)

Best of luck - hope this info helps some of you in 20-30 years! LOL.

Jason