The Retirement Shortfall and Solution Strategy

One of the biggest risks and major worry to a comfortable retirement is running out of money too soon.   Only 2% of Americans are financially independent at age 65, and most face retirement with Social Security income of less than $1,250 per month. It is currently estimated that an individual will need retirement funds of approximately $2 million to generate $5,000 of monthly income and provide the capability of independently providing for themselves. 

The Retirement Shortfall

Related statistics:

• As of 2004, the average balance in a 401(K) was only $61,000. This is alarmingly below the 1999 levels of $64,000.  Since workers have been contributing roughly the same percentage of their salary to their 401(K) plans, this indicates that stock market losses are primarily responsible for the recent decline. Source: Dow Jones News.


• The annual Retirement Confidence Survey found that 52% of those surveyed have less than $25,000 set aside for retirement, 13% have $25,000 to $49,999, and 11% have $50,000 to $99,999.  Just 21% have $100,000, or more. Source: San Francisco Chronicle, 2005.


• Only 1% of Americans invest a portion of their retirement savings plans into real estate.  This primarily occurs because most investors do not know that section 408A of the IRS Tax Code permits real estate as an investment choice of an IRA or 401(k).
  

Higher Rate of Returns are Needed for Retirement

• Warren Buffet (CNN Money, May 5, 2008) expects stocks will not exceed a 7% rate of return.  At 7%, a $50,000 IRA invested in mutual funds returns $335,600 at retirement in 20 years.

• Even at a 10% rate of return, $50,000 will only grow to $558,800 in 20 years. This too, is probably not enough for retirement.

• A solution is investing in a higher growth asset that averages 16% and returns $1,368.000 in 20 years.

Many investment alternatives - stocks, mutual funds, oil and gas, precious metals, savings, CD’s, T-bills, LLCs – provide less than a 10% annual growth over a long-term period.  When compared to land, these alternatives are constantly in a state of flux and adjustment, and the basis for profit is unpredictable.

Solution Strategy

IRA Land Group was founded to assist an investor acquire highly appreciating real estate for retirement wealth accumulation using cash or IRA funds.  The use of IRA funds provides for even greater wealth accumulation through tax deferrals while providing additional diversification of their asset portfolio.