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Your Residence Is Your Retirement

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grandmother cottage

For many contemplating retirement, one’s future living arrangements is the most thought about – yet least acted upon – aspect of retirement planning. According to the U.S. Bureau of Labor Statistics even though housing is the largest average cost in retirement, older Americans move far less often than the general population. The home is the last bastion of the status quo, and many remain in their existing homes, unless forced to move due to failing health. Yet from a financial standpoint, this rarely makes sense. A house is generally a poorly diversified, cash flow intensive investment that historically only maintains a price commensurate with inflation. At a time when human capital is exhausted and financial capital is being decumulated, a house should be seen as a lifestyle choice, not an investment. Living in place is a consideration, but changing residence at retirement may be the better move.  

Financial considerations aside, where you live in retirement affects many other aspects of a happy post-employment life. Where you live influences your hobbies, social network, family life, and access to health care. In sum, your residence is your retirement, so you should treat this as a primary decision in retirement planning.

The good news is that, assuming there is some degree of retirement savings, retirees have many choices. Not only can you opt for a different geographic location (for example, South versus North), but you can also select a different housing structure (condo versus house) or new living arrangement, such as an active living community versus a traditional neighborhood. Financing a new housing lifestyle offers options as well: reverse mortgages, sale-leasebacks, and continuing care retirement community arrangements, are all possible funding approaches.

The challenge is you haven’t retired before, so it’s hard to envision how all this works. Since we best learn by example, perhaps studying the retirement arrangements of others will simplify the task. Below are three case studies of successful retirement moves, which offer a vision of the possibilities that exist. 

Oliver – The Mother-in-Law Cottage

Oliver and his wife moved to the Midwest while in their 40s to pursue his career as a professor. His wife died of cancer in her late 50s, and Oliver continued to work until his late 60s. In pondering his retirement as a widower, Oliver, an avid fly fisherman, came to realize that nothing was keeping him in the Midwest, and his daughter and family lived in fish-friendly Seattle. Housing was his biggest challenge – the Seattle real estate market is notoriously crowded. Oliver’s solution was what is colloquially called a “granny pod” or “mother-in-law cottage.” Because of the housing shortage, Seattle zoning laws allow families to build small housing structures in backyards and alleys of neighborhoods. With the proper permits, Oliver was able to build a small house in his daughter’s backyard, and he now divides his time between watching his grandchildren grow and perfecting his fly fishing casts. 

Carolyn – Small Apartment and Big Boat

Carolyn and her husband created a successful business in Duluth, Minnesota – so successful they were able to retire early. They wanted to relocate to somewhere with warmer weather than Duluth, so they moved to the Florida Keys. They fulfilled their retirement dream by acquiring a small apartment and a big boat. Living primarily on their boat, they enjoyed retirement by sailing the Keys. But when Carolyn’s husband died unexpectedly eight years into their storybook retirement, Carolyn found herself in her mid-60s facing a new phase of life in retirement. She didn’t envision the Keys as where she wanted to be a widow for 20 plus years, so she decided to move to a condo upstate. Wanting to pay off the boat and finance her new condo, she secured a “HECM for Purchase.” A Home Equity Conversion Mortgage (HECM) for Purchase is a reverse mortgage that allows a senior to purchase a new residence using loan proceeds from the reverse mortgage. This arrangement allows Carolyn the flexibility to decide if and when to tap into her home equity without taking on the risk of a future foreclosure. The second act of her retirement has begun. 

Tom and Marge – Continuing Care Retirement Community   

Tom was an FBI agent and Marge was a teacher. They were able to retire from full-time employment comparatively early, and they wanted to relocate from their last assignment in Chicago. Their solution was to travel around the country, in part to see the sights and in part to decide on a retirement location. Once they landed on eastern North Carolina as their choice, Tom found a job teaching part-time at a community college. They bought a house and lived there for 15 years. In their late 70s, frailty concerns became an issue. They researched their options and ended up selling their house and making an up-front payment to a Continuing Care Retirement Community (CCRC). This gave them a safe, and pleasant location to age in place. For three years they enjoyed their two-bedroom apartment, making new friends, and aging gracefully. When Marge died at age 80, Tom moved to a one-bedroom apartment in the same building and lived there for several more years. In his final days, because he lived in a CCRC, he had easy access to needed health services, and he died where he lived. Tom and Marge were my parents. 

A Checklist For Your Retirement Living

Your retirement journey will be unique, but if you’re like most retirees, where you live will influence that journey. Particularly if you envision a change of location when you retire, there are some fundamental considerations to keep in mind. Topping the list are geographic location, residence arrangements, healthcare access, financing, and contingency plans. 

Geographic Location An old adage cautions “don’t retire where you vacation.” Although this warning may be overstated, there is a kernel of truth in that retirement is more than just locating where you enjoy playing. While it may be a great stress reducer to sit at a tiki hut on the beach, an ocean front property may not be ideal for retirement living. That said, many retirees do include their hobbies and recreation in their deliberations. Tom and Marge chose North Carolina because they loved to golf. Carolyn and her husband were living the dream on their boat in the Keys. And proximity to the grandkids was a big plus for Oliver. Indeed, for many retirees, watching the grandkids grow is a favorite pastime.

Choice of location can also be influenced by tax issues. In part due to the limits on the federal state and local taxes (SALT) deduction and spurred on by work-from-home technologies, income-tax-free states have seen an explosion in affluent pre-retiree transplants. These families are moving up their plans to relocate to tax-friendly jurisdictions.

Residence – You don’t need to look further than The Villages retirement community in Ocala, Florida to see how living arrangements are a key retiree consideration. The county population for The Villages has increased more than 54 percent since 2010. Call it cookie-cutter or call it convenient, this “active adult community” for individuals age 55 and up attracts many seniors—with a current population of about 80,000. This birds-of-a-feather-retire-together concept has been well-tested in the U.S. The original active adult community, Arizona’s Sun City, is now more than sixty years old.  

A competing model, the CCRC, is flourishing as well. This approach involves a decision that is for life, but in return it eases the residential issues related to aging. As your needs change, you can progress from independent living to assisted living to skilled nursing. Both the CCRC and active adult community models offer community, access to medical care, and ample conveniences.

By moving to a CCRC, Tom and Marge were able to better enjoy the later part of their retirement because the living arrangement relieved them of the challenges of home ownership and cooking, and it allowed them to also shift their residence as their needs changed.  

Health Coordination – A consideration related to physical residence is access to health care. After losing her husband, Carolyn realized that a boat on the Keys was very limited in terms of access to medical care and moving to a condo on the mainland offered more options. Even more efficient was Tom and Marge’s move to a CCRC, where they were literally within walking distance of the hospital. Even Oliver improved his situation when he moved next door to his daughter. As a widower, he now has family nearby if he needs help with doctor appointments. 

Financing – Because retirement involves decumulating assets, a significant consideration is funding any planned change in residence. If the retiree has no home equity or savings, options are limited, and Medicaid planning may be required. If, however, the retiree has home equity, many options exist to finance a change in residence. In general, for a recent retiree, taking out a new conventional mortgage is both impractical and a financial burden. There are better ways to free up or leverage existing equity.

Oliver obtained a swing loan secured by his home in the Midwest to finance construction of his “granny pod” in Seattle. When he subsequently sold his house, he was able to pay off the swing loan, and free up cash flow for retirement income. With Carolyn, her HECM for Purchase provided significant flexibility in managing her future cash flow needs. She used some of the HECM loan proceeds to pay off the remaining balance on her boat, and she now has a line of credit that she can tap if she needs to increase her retirement income. A reverse mortgage can be expensive, but for Carolyn it is worth the cost because it protects cash flow without risking foreclosure. Finally, as for Tom and Marge, with the sale of their house they were able to pay the one-time deposit on their CCRC contract, and free up cash to supplement their CCRC monthly fees.    

Contingencies – Retirement is rarely a straight line from leaving work to dying years later. This is particularly true when thinking about couples. All three of the above stories have a common element – they involved marriages. In Oliver’s case, his wife died before retirement; with Carolyn her husband died early in retirement; and with Tom and Marge, one spouse died later in retirement, but still years before the survivor passed away.

When planning for retirement, a couple must deal with the reality that spouses rarely die at the same time, and that the death of a spouse dramatically affects the survivor’s retirement plans. It took a decade, but once Oliver retired, he moved thousands of miles away. Carolyn, already in retirement, transitioned from a boat to a condo. And Tom simply changed apartments, but even this transition was lifechanging for a man in his 80s. Contingency flexibility should be part of the retirement plan because one way or another change is going to happen.

MORE FROM FORBESThe Best Places To Retire In 2021

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How To Launch An Entrepreneurial And Investing Career When You’re Young

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Saving for properties

Canadian Entrepreneur with Global Invest, on a mission to help people invest in real estate to create generational wealth.

The best time to start entrepreneurship and investment is when you are still young because the longer your financial investments will be operating, the more substantially your savings account will grow. I receive many queries from young people who want to set up an entrepreneurial project and invest in real estate. I strongly encourage them to do so. Despite your young age, you can learn how to save and invest your money to yield additional income. Here’s how.

Save Money

You might be wondering right now how to save money without a salary or with minimal income. It is possible! Here are two smart ways to build up a savings account and generate returns. 

1. Tap into your own pocket money: If you are still a student or under the care of your parents, you may receive a monthly allowance from your parents or student financial aid. If this is the case, I advise you to start saving based on your available cash, at least $100 per month, in an individual savings account. The IRA is suitable for you at this point as it is tax-free.

2. Look for a student job: To save sufficiently for your investment project, search for a part-time job that will provide additional income you can direct toward savings. You will want to build up considerable savings as a first step in order to achieve a return on your future investment.

Build Your Business Online

In order to start a business and invest at a young age, you must recognize that the internet has created a global village where everything can happen with just a click. Indeed, the web is full of opportunities that should not be neglected. 

1. Build your own website: As a student or young professional, building up a substantial savings account can be quite difficult. One strategy I recommend is creating a website where you can offer your services. The internet is a massive customer niche where possibilities abound, from e-commerce to offering consulting services to writing sponsored blog content and more.

2. Brand yourself on social networks: Social networks have significantly reshaped the business world. It is difficult to succeed without creating a recognizable brand across social networks, especially if you want to start a business and investing career at a young age. In this respect, I advise creating Facebook accounts, Twitter accounts and even a YouTube channel. These accounts can significantly help you boost your eventual rate of return.

Invest In Real Estate

Once you have saved enough money through your business and savings plans, make your money work for you. Investing in rental property is one of the best ways to diversify your monthly income.

1. Invest with REITs: A real estate investment trust, or REIT, is a great stepping stone to entrepreneurship and investment for young people. Also sometimes referred to as real estate paper, this type of investment offers excellent possibilities in terms of rental management, especially if you are a student and school takes up most of your time. The REIT you invest with will handle all the leasing, renovation work, rent deductions, etc., and interest rates generally vary between 5% and 9% depending on the type of REIT chosen. 

2. Explore real estate crowdfunding: Crowdfunding is another interesting approach for young people who lack the required funds to obtain a mortgage and represents a supportive financing method for real estate projects. It plays the same role as a banking institution as it provides money to start your real estate project. The annual rate of return on this type of funding ranges from 8% to 10% depending on the size of the investment.

3. Purchase a parking space: It is wise to start out small and work your way up. For example, you can start by buying a simple property such as a parking space, something that may be much more attainable for young entrepreneurs. By starting on a small scale and planning for the short term, you can minimize your risk.

Improve Your Skills Through Training 

In order to achieve long-term investing success, you need to be an expert in your field. For example, if you intend to invest in rental property, I recommend taking a property investment course in order to build a good investor profile. You need to know how to invest in order to make the most profitable investments. Constant training provides a number of advantages, including:

• Staying competitive.

• Increasing your profitability.

• Acquiring new knowledge.

• Keeping up to date on industry trends.

• Increasing your credibility and building customer loyalty.

As I like to say: In rental investing, what you don’t know can cost you a lot in terms of money, opportunities and strategy. So, it’s important to keep training. Indeed, investing in real estate at a young age and improving your skills over time is an excellent strategy for those who aim to become rich faster, take an early retirement and live on generous retirement savings generated by your real estate investments. 

The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.


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Ten Best Outdoor Design Trends Of 2021

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A picnic with rattan chairs, pillows, a table and other accessories in a woody outdoor space.

Summer is finally here. If you’re excited to see friends and family, you aren’t the only one. For many of us, this season is sure to be filled with pool parties, patio picnics, and backyard barbecues. So, there has never been a better time than now to refresh your outdoor space. Whether your backyard needs a major overhaul or just some sprucing up, here are the top outdoor design trends of 2021. From the colors you must accessorize with to the design elements that stayed popular from last year, these are all great ways to upgrade your outdoor space.

Painted Details

Bid farewell to the white picket fence and say hello to pink, aqua or any vibrant hue you choose because painted details outdoors is one of the newest trends of 2021 according to Danielle Blundell, Home Director of Apartment Therapy.

This includes everything from fences painted unique colors to custom murals and even painted pool decks. This is also a great DIY project to try. “Exterior paints can be different colors. And you don’t have to worry about the wear and tear. You might have to refresh it seasonally the same way do with decking or your driveway,” she tells me.

This trend may very well be inspired by the Instagram walls that we so popular prior to the pandemic. 

Rattan

We’ve been seeing rattan for several years right now and there’s no chance this trend is going away any time soon. There’s a good reason for this. Rattan is an eco-friendly, high quality material with a timeless aesthetic, according to Janelle Bowers, founder and CEO of Resol Beach. “Rattan is made from natural, sustainable materials that can weather the elements and will last over time. It has been a major trend in outdoor design because it allows us to spend more time outside while enjoying these products, which in turn creates value through memories and experiences.” 

The only caveat to keep in mind is that it can take a little bit of work to maintain. “The best way to care for rattan is treating it like any other piece of furniture. Proper care will ensure the longevity of the natural materials. To maintain the beauty of rattan, clean regularly with a damp, clean cloth and avoid harsh chemicals or oil-based products. When not in use, use a cover to avoid direct sunlight and store in a cool, dark place,” say Bowers.

Broken Plan Layouts

If the pandemic taught us anything, it’s that the open floorplan home isn’t quite as appealing when everyone is home all day every day. The same rules apply to outdoor spaces as well, interior designer and HomeGoods Style Expert, David Quarles tells me. “This summer, creating designated spaces outdoors is just as important as it is indoors, as broken-plan layouts are rising in popularity.”

Fortunately, building out a separate layout for patios and backyards can be easy. “Just use your home’s interior layout as your inspiration. Designing outdoor kitchens, lounge areas and dining ‘rooms’ can be easy and affordable by shopping stores like HomeGoods. My favorite trick is to mix-and-match chairs within matching outdoor dining sets, like I did with this solid teakwood table set I found at HomeGoods, to creatively bring the indoors to your outdoor oasis” he says.

Yellow

We could all use a little extra sunshine and there’s no better way to do this than with the color yellow.

“Yellow is the color of optimism and a beautiful way to add a bit of cheer to any space. Try adding hints of your favorite shade of yellow with weatherproof throw pillows, ceramic vases, or handcrafted baskets like I have on my deck’s lounge area, that I purchased from my local HomeGoods for amazing prices! Yellow is also one of Pantone’s colors of the year,” says Quarles.

Fire Pits

Fire pits were a major trend last year and at one point most major retailers were seemingly sold out. Whether built-in or freestanding, they’re just as popular this year. According to broker Gerard Splendore of Warburg Realty, these accessories are the ideal way to get groups outside and reunite with friends and family.

“The fire pit is a gathering spot seen more frequently this summer, as neighbors and friends get reacquainted after isolating for much of the year. Lighting a fire for immediate family members is just as satisfying as it is for a larger group,” he says.

Outdoor Speakers

Whether it is a hardwired system or a portable Bluetooth speaker, as we say goodbye to Zoom happy hours, music is a great way to create an ambiance. “Outdoor music speakers or portable sound systems are a part of every summer gathering this season, which may not be to everyone’s liking. Loud music late at night is a part of the summer landscape, both urban and beyond, but is more prevalent this year as people congregate outdoors,” says Splendore. While you might enjoy the music, you should still be considerate of your neighbors unless you want to read about it on NextDoor.

Outdoor Kitchens

If you’re considering selling your home, there couldn’t be a better time to install an outdoor kitchen. And if you plan to stay, they’re an easy way to help entertain friends and families, agent Karen Kostiw of Warburg Realty tells me.

“What’s a party without the food? Outdoor kitchens have been built out with all of the bells and whistles: fancy grills and smokers, pizza ovens, refrigerators, etc. It’s still difficult for many people to travel, so they are making their outdoor living spaces into a special oasis.”

Greenery Everywhere

While plants have been a major trend for both indoor and outdoor spaces, it’s becoming popular to integrate greenery into other aspects of design. “A lot of cool treatments you’re seeing include stones and grass mixed together, or pavers and grass mixed together,” Blundell tells me.

In addition to this, she has seen a lot of people installing checkerboard floors outside with pavers. “That’s kind of another big trend [along the lines of a] return to classical motifs.”

If grass isn’t growing abundantly in your yard, Blundell suggests mixing it with a bit of faux grass “It’s hard to tell what’s real versus fake,” she says. After all, every home has a few secrets.

Bringing The Indoors Out

Bringing the outdoors inside has been one of the biggest design trends in recent years. Now bringing the indoors outside is having a moment. “At Apartment Therapy’s Small/ Cool Experience, it’s one of our top trends for 2021. And it’s all about maximizing your comfort and being cozy outside no matter the season,” Blundell tells me.

To get this look, she recommends accessorizing your outdoor space with throws, lanterns, and bistro lights. “Turn whatever sliver of space you have, into an outdoor living room where you can kick back and relax. And it goes further than just lighting and textiles. We are starting to see mirrors come outside and sculptural pieces on the sides of homes.”

Outdoor Rugs

Outdoor rugs are another example of bringing the indoors outside.

So what’s the best way to integrate this accessory into your outdoor space? “When it comes to styling, I always start with an outdoor rug as it’s typically an indoor element that can bring beautiful texture and familiarity to an outdoor space. Be sure to look for a rug suited for outdoor use: a material that is easy to clean, won’t fade with sunlight and can handle high moisture and heavy foot traffic,” says Roxy Te Owens, founder and creative director at Society Social.

Outdoor rugs look great on patios or even to section off an outdoor living space in a backyard with a dining table or a sofa and chairs.

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15 Strategies For Succeeding In A Saturated Real Estate Industry

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Photos of featured members.

Many professionals believe they need to avoid a saturated market because it presents too much competition. However, there are plenty of opportunities for innovation in markets heavy with competitors. Real estate professionals are not immune to an overly saturated market. As such, they’ll need to carefully implement strategies that will enable them to experience successes in their local communities.

Which strategies will allow real estate professionals to focus on standing out from the pack? Below, 15 members from Forbes Real Estate Council offer their best advice on how to succeed in a saturated real estate industry.

1. Always Bring Value To Your Clients

Bring real value to your clients so you are no longer a commodity. In that space, there is no saturation! Keep elevating your knowledge, too, so that you are a few steps ahead of the pack. – Nancy Kowalik, Nancy Kowalik Real Estate Group

2. Gain Access To Capital

Finding reliable and cheap capital, which you can execute efficiently, is the greatest obstacle. The CRE space will only get more crowded, and capital allows investors and owners to move faster than their competitors. – Paul Monsen, GSP


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3. Be Innovative And Creative

In these times, you must be able to not just deliver but deliver quickly. To do that, you must be innovative and creative in how you operate and market. – Jammie Jelks, Legacy Home Loans

4. Use Technology To Save Time

Go tech-first. You need to delight your customers and do it on a cost basis that is more efficient than ever required. If you can use technology to automate all the busy work, you have time to focus on what makes you stand out. It will also save you time in the long run. Time is money, so you’ll become more efficient. You’ll be able to focus on providing the important human touch that is critical in real estate. – Chuck Hattemer, Onerent

5. Find Your Expertise In A Specific Niche

The riches are in the niches! Always remember that. By focusing on a specific niche in the market, you will be seen as the expert. Thus, you have much higher chances of success in a saturated market. For example, if you focus on investment sales in the commercial real estate market, you will become an expert in that field and always stand out among other real estate professionals. – Pamela Bardhi, The Mosche Group

6. Answer The Phone And Return Calls

It’s simple: answer the phone or, at the very least, quickly return every call. It’s a No. 1 rule in deal-making 101. I know it sounds obvious, but nowadays, it’s increasingly rare to catch someone on the first try, so use this common frustration to your advantage by leaving voicemails and waiting for a call back. We’ve won more business simply because we picked up the phone or returned calls before anyone else had. – Ronnie Miranda, NewQuest Properties

7. Utilize Credibility Building Tools

Find the thing that sets you apart. We make sure that we are providing as many value-adds as we can for the seller. We also use testimonials and other credibility builders, such as BBB and Google My Business reviews. If you’ve been in the industry for a long time, these credibility builders are the easiest way to set yourself apart and position yourself as an expert with longevity in the business. – Melissa Johnson, webuyhousessanantoniotx.com

8. Build Trust In Local Communities

In an increasingly saturated real estate industry, companies that are mission-driven and generate returns for all stakeholders demonstrate distinct value. We focus on being proactive community partners and building trust in the communities we serve. This helps us maximize our impact and catalyzes success on future projects. – Jeremy Bronfman, Lincoln Avenue Capital

9. Share Knowledge With Industry Experts

Engage industry participants. If there were a magic method, you wouldn’t believe it because of all the get-rich-quick schemes around. If those purveyors really knew what they were selling, why would they share that information? What needs to happen is a concerted engagement effort with clients and industry functionaries. Make a lot of calls. Once you have done that, get updated to expand your own knowledge. – Michael J. Polk, Polk Properties / Matrix Properties

10. Strive For Creativity In All That You Do

Be flexible and creative around how you align the values, desires and interests of all parties in the transaction. This method has the ability to unlock opportunities that are less saturated while maintaining alignment with your clients. In my business for example, we are the creators of radical consistency, which makes our product unique in itself—in what could be called a saturated marketplace. – Alex Allison, D. Alexander

11. Be Authentic With Clients And Investors

Always be authentic in your interactions with your clients and investors. Sometimes, this business can have a sole focus on closing the deal. It’s important to remember to bring value first to the customers you serve and success will follow. – Todd Sulzinger, Blue Elm Investments

12. Prioritize And Delegate Tasks

Do not spread yourself too thin. One of the biggest mistakes is to get involved with too much too fast. Real estate professionals are known for wanting to do it all alone, from marketing to learning about every community in town. It is important to build solid foundations, delegate jobs that are not income-producing and focus on a niche. – Marco Del Zotto, LIV | Sotheby’s International Realty – Breckenridge CO

13. Become An Authority Brand

In a very competitive environment, you must establish a brand with very strong authority. Agents should define a niche, such as first-time buyers, luxury housing or veterans, and master it. Then, everything you do and say comes from that authority stance. Clients want to work with experts, not amateurs. Begin blogging, doing live videos and collecting recommendations. – Lisa Copeland, The Agentcy by Tarek El Moussa by Exp Realty, LLC

14. Be A Compassionate Human

Be a good human. I know that sounds crazy and incredibly simple, but that’s because it is. Now more than ever, people want to be cared for, heard and treated well. Be patient, kind, follow up and follow through. Love is the best thing we do. As romantic as it sounds, I believe in this phrase in business just as much as I do in life. – Chris Turcotte, Centum Financial Group

15. Commit For The Long Haul

Be persistent about staying in it for the long haul. Newbies come and go but to truly succeed, you need to commit yourself to the long haul, during the good times and the bad. Master your craft, and become smarter and more innovative than your competition. – Nick Ron, House Buyers of America

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