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  Home Equity Can Create a Tax Free Retirement Plan The American Dream is to own a home free and clear....or is it? Traditional financial advice tells us to pay off our mortgage. However, with no mortgage payment and nearing retirement, many baby boomers and retirees find themselves house rich and cash poor. According to an analysis by the Brookings Institute, based on 2001 savings data, even among the richest members of the 55-59 age group, the median account balance in 401(k) plans was only $299,000, and that was for households in the top 10 percent of incomes. The median holding for all households with retirement accounts in that age group was $50,000. What conclusion can be drawn from these numbers? Health care costs are rising and Social Security and pensions being insuffcient to maintain their standard of living, retirees and baby boomers are left with few options: (1) Go back to work (2) Sell their home and relocate leaving memories and family behind, or (3) Taking out a costly, high rate, restrictive reverse mortgage. Now there's another option.......A cash out refinance mortgage loan. How can this be? Let's explore the mortgage in more detail and you'll be amazed at what you discover. Home Equity is Not Guaranteed As a homeowner, would you agree we've experienced enormous equity appreciation over the past 4-5 years? In fact, some areas of the country have appreciated by as much as 25-30% per year. Home equity appreciation is not safe and accessible to you during a market correction, natural disaster or loss of employment. In fact, most people, especially retirees and baby boomers, unexpectantly need cash when they are sick, unemployed or have insufficient income. Trying to qualify for a home loan under these circumstances can be impossible in the existing tight lending environment we are in. Knowing this, many people that will need to rely on that home equity would agree than that it is better to have access to that home equity and to not need it, than to need it and not have access to it. Your New Home Loan Payment Can Help Create A Tax Free Retirement With a growing urgency to save more, traditional retirement accounts such as IRAs and the 401k have limitations and restrictions when allowing you to contribute to, grow and transfer your retirement nest egg. What is the difference in tax benefit between paying $15,000 in mortgage interest and $15,000 to your 401k? Nothing? They just show up on different places on your tax return. However, with idle equity trapped in the home, paying $15,000 in mortgage interest a year has allowed you to leverage $250,000 in home equity at 6% interest, versus contributing $15,000 a year over 16 years in qualified plan contributions. If you have had your existing real estate loan for some time and pull out home equity via a new mortgage, your new monthly payment may not go up as much as you think. By leveraging home equity every mortgage payment a homeowner makes is indirectly funding their retirement account. The national savings rate is dwindling and a surplus of home equity that is not liquid or safe, trapped in the home, you can catch up on 20 years of savings by leveraging that home equity prudently into vehicles while protecting your principle at the same time. Let's look at an example up close. How Can Investment Grade Life Insurance Be A Baby Boomer Retirement Plan? Investment Grade Life Insurance is available where we can reposition $250,000 of tax free funds, being home equity, that remain accessible when you need it without penalty (liquidity), are principally protacted in a bear market (safety), and can earn a 30 year average of 9.38% rate of return that allows youto create a prudent arbitrage (rate of return) without being directly tied to the stock market therefore avoiding the roller coaster ride. Additionally, this private retirement vehicile allows tax advantaged contributions, tax free accumulation, tax free withdrawls and tax free transfer that would grow to an amount that could pay off your mortgage many times over, maximize your tax deductions, and fund your retirement without fear of outliving your income, while offering you all the emotional benefits of having a home paid off. The most unique feature of a permanant life insurance is that under Section (72e) and 7702 of the Internal Revenue Code the accumulation of cash inside the insurance contract is tax advantaged. Not only can the cash value accululate tax free, but the cash can be accessed tax free. It is a unique vehicle that allows tax free account value accumulation, allows you to acccess your money tax free, and, when you die, blossoms in value and transfers income tax free. There is no other vehicle that can create this tax free retirement plan. This article was written by Ogan Financial Group, Inc. Ogan Financial is a premier financial services firm that specializes in asisting individuals, families, businesses, and institutions in the optimization and protection of their assets. Their mission is to teach and implement the systems and strategies that deliver perpetual financial and family empowerment. To lean more about employing these strategic equity strategies for wealth optimization as illustrated in the Missed Fortune book series by Douglas Andrew, please register for one of their free upcoming educational seminars or webinars by visiting their website at www.oganfinancialgroup.com, and ask for Michael Voogd, who was personally trained by the author Douglas Andrew to implement these strategies.
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