Are you ready for retirement? Have you considered a self-directed IRA?
It is not a comfortable question for most people. They think it’s too late in the game to start preparing. Or they think they don’t have enough money now set aside money in the future. Or they may not even know how to get started with a self-directed IRA, so they postpone and postpone and postpone until they think it will be too late to do anything for retirement.
Let’s fix all that.
It begins with an assessment of where you currently are in your retirement progress. Don’t worry: this doesn’t have to be a painful process. Instead, it can feel like a burst of energy in the way of building a new retirement strategy. If you ask us, that’s an exciting prospect, to finally take charge of your financial destiny. Let’s handle it all with a retirement self-assessment.
First things first: self-assessment
The first step in evaluating your ability to retire is to examine what you already own. Already have an IRA? A 401(k) at work? Take out a piece of paper and write down the values of those accounts so that you know what type of assets you already have in your hands.
You should also consider other assets. For example, do you own real estate? Owning your own home is the kind of information that will be critical to understanding your position in retirement: your home is an asset like any other. Other real estate should also be accounted for and tabulated, even if you don’t necessarily plan to make this real estate part of your retirement “savings nest” just yet.
Try to write this on a piece of paper with a pen; it’s a good way to organize your thoughts, and being limited to just one sheet of paper to write on will help keep things simple and easy to read.
Assess your retirement goals
Now start a new sheet of paper and try to think not of the present, but of your future goals in mind. For example, what kind of lifestyle will you want when you retire? How much investment money will you need to have to guarantee yourself an income that will pay for property taxes, basic bills, medical expenses and more?
It may seem like a hypothetical situation rather than an assessment, but these numbers will be incredibly important as you move toward retirement.
Create a list of potential strategies
Now it’s time to connect the dots.
You may notice a difference between how much you currently save for retirement and your goals. In that case, you’ll need to think about being more proactive in setting money aside. You will also have to think about your ROI. If you need a higher overall ROI than traditional IRA investments typically provide, you may want to consider a self-directed IRA. Self-directed IRAs give you more options for portfolio diversification, such as investing in real estate or intellectual property. And since self-directed IRAs are just that, self-directed, you can often save on money manager fees, giving you more money to put toward your retirement goals.