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February 2007 |
Capital Retirement Strategies, Inc.
Specializing in retirement plans
and personal investment management
In This Issue
Greetings! Now that the holidays are clearly behind us, we can start thinking about more exciting things... like taxes! Yes, tax time is quickly approaching. If you find yourself owing money to Uncle Sam this year, it may be a good idea to think about making contributions to a retirement plan. Whether you bump up your 401(k) contributions at work or begin investing in an IRA, these are clearly win-win situations for most people. First, you get an immediate tax-deduction. Secondly, you're setting money aside that you'll need during retirement. Ask your CPA which retirement plan offers you the greatest benefit. Real estate always seems to be a hot topic for investors. Whether it's the booming market we've experienced in single-family homes over the past several years or the ominous "bubble" that we keep hearing about, real estate seems to be in the news all the time. If you would like to learn how you can benefit from investments in commercial real estate without being Donald Trump, please check out my article, "What in the World is a REIT?" If you read something you like, please consider forwarding my newsletter to someone who may also find it of value. Thanks for reading! Best regards,
Real Estate Investment Trusts, commonly referred to as REITs (pronounced “reets”), are investment companies that invest in various types of real estate. These companies sell shares, not unlike stocks and mutual funds, to individual investors. The pooled investment dollars are used to purchase and manage an array of properties. While it is not uncommon for individual investors to own investment properties such as multi-family houses or condos, it is impossible for most average investors to purchase larger, commercial properties such as office buildings, shopping centers and apartment complexes. Through ownership of a REIT, an average investor can buy a diversified, professionally-managed portfolio of dozens or even hundreds of commercial properties. Just like you can buy different types of mutual funds, you can also invest in different types of REITs. Some specialize in retail spaces such as shopping centers or malls, while others concentrate on office buildings. Still others invest in warehouses, apartment complexes, ski areas and golf courses. Investors hope to make money in REITs in the same two ways that people want to make money from owning rental properties. You earn money from collecting rent, and you can make money by selling the property for more than you paid for it. The same basic principals are true for real estate investment trusts. Benefits of REITs include the following:
There are risks to investing in real estate just as there are risks to buying stocks. An investment in a REIT should be carefully considered in light of your individual financial situation. If you would like to learn more about investing in real estate investment trusts, please feel free to give me a call.
Bringing Wall Street to Main Street I was recently featured in a column in the Concord Journal. Jane Hallowell writes a regular column for the weekly newspaper and generally focuses on local people or events. I was fortunate to be the subject of her January 4th article entitled "Bringing Wall Street to Main Street." For a link to the story, please click here.
2007 Retirement Plan Contribution Limits Contribution limits for individual retirement accounts, Traditional and Roth IRAs, have remained the same for 2007. You can contribute up to the maximum of $4,000, unless you are over 50 years old, in which case you can put in $5,000. This catch-up provision is designed to help people over 50 make additional contributions to their accounts to "catch-up" and get their retirement accounts back on track. The maximum contribution for most company retirement plans has increased slightly. The 2007 limit for 401(k) plans is now $15,500. Contribution limits for other popular plans, as well as the "catch-up" limits are listed below. Plan Name Max Contribution Over 50 Max Contribution 401(k) $15,500 $20,500 IRA $4,000 $5,000 Roth IRA $4,000 $5,000 SEP IRA $45,000 Not Applicable SIMPLE IRA $10,500 $13,000 Individual 401(k) $45,000 $50,000
- I encourage you to join me in supporting the upcoming benefit for Our Place, a daycare for homeless children in Cambridge. On March 20th, at ZA Restaurant in Arlington, an evening of food, drink, music and mingling, will benefit this wonderful center. "Our goal is to provide stability; something consistent that kids can count on," said Darlene Meehan, director of programs at Our Place. The Salvation Army center first opened in 1987 and currently serves 38 homeless kids. The benefit is the work of John Takvorian, a realtor in Cambridge, and his wife Kim, a loan officer in Lexington. All you have to do is show up on March 20th with a donation. Cash or checks are always welcome, but toys, books or other kid's stuff is great also. ZA is located at 138 Mass. Ave. in Arlington. For more information, call John at 617-715-9242. Hope to see you there! - If you know someone who is going through a divorce, please have them contact me and request a free copy of The Divorce Survival Guide. As many of you know, I am a member of the IDFA (Institute of Divorce Financial Analysts) and the organization has recently published a practical guide to getting through this often-sticky situation. - International Networking Week is February 5th-9th, 2007. Yes, believe it or not, this is a real thing... INW was started to celebrate the key role that networking plays in the development and success of businesses around the world. I am part of the BNI group that is hosting an after-hours business mixer on Wednesday evening, February 7th in Concord. The event, in celebration of the first annual International Networking Week, will take place at the Trinitarian Congregational Church Hall on Walden Street beginning at 5:30 pm. There will be beer, wine, soft drinks, snacks and door prizes. The cost is $10. If you are a local businessperson looking to meet other ambitious entrepreneurs, I hope you'll join us. Give me a call to register or for more information.
If you've recently had something great happen in your life or in your career, I'd love to recognize you for it! Send an email to dave@capretirement.com and I'll try to get it in an upcoming issue of Capital Concepts.
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