Does Commercial Loan Payment Count Toward Retirement !

Our final question of the day comes to us from Tina in Cabot

Can I count my commercial building loan payment toward my savings rate toward retirement

given that I plan on selling it at some point to help fund retirement

Is there anything specific I need to know about that as part of my plan

Tina, I'd say no. You can't count the payment. Now, you've got equity and you're going to be able to sell that

but the portion, there's a big portion of your payment that is going to be kept by the

bank. So you certainly can't count the savings rate or the full payment as the savings rate

toward your retirement savings. The math's not going to add up there because the bank's going

to take that interest. The bank's going to take those payments. Obviously, we're assuming you have

a loan. We don't know where that loan is in terms of its payback, but there's going to be some

interest due there, right? So the full amount can't be considered the savings rate. However

the value of the building could be incorporated into future savings. Well, and one of the challenges

there, and this is somewhat true of other investments as well, but we don't really know what the future value is going to be of that building and what can you get off of that in terms of a revenue stream once it's paid for. Once you transition into retirement, if you still own that, then what is the value to you in terms of your retirement income? And Scott, one of the things that we've seen quite a bit since COVID, you know, when COVID hit and everybody had to go work from home, then there were a lot of

of people who frankly never went back to the workplace. We have team members at Gen Wealth

who were here pre and had an office space assigned to them and they have never come back into the office full because relative to their role we now as a company look at that differently and go you know what

you don't have to be physically in the office to do this job

So that has happened nationwide, frankly globally, in this change of mindset about office space

And so I get a little bit concerned when somebody says, I own real estate

state and it's a commercial building and I'm counting on it to a certain degree for my retirement

income because we just don't know what that's going to look like for you. Yeah, I think that's a

huge point because we don't know where the future of real estate is going to be and you really

in essence, put it into, we don't know that it's office space, but whatever it is, maybe it's a

good investment, maybe it's not in 20 years. So I think it would be wise to make a plan but not count

on that commercial building. You need liquid assets. You need other types of investments. We're talking about diversification here. I think real estate is a great

piece of the puzzle. But if that's all you're really counting on is I'm going to pay this loan back

and I'm going to have a commercial building and that is funding my retirement. I think that's the wrong way to think about it. Scott, you and I both have real estate outside of Gen wealth. We

both have some and we're doing it in very different ways, but we both have that as an ancillary

part of our overall plan. But the key there is ancillary because we're not counting on that. And

and whatever we get from it is icing on the cake so to speak so and you mentioned planning

um i i would encourage you really uh to do two different types of plans or two different completely unique plans here tina one of them is to plan with the building but to do that very conservatively in those assumptions And then another one is to plan completely without that building because we just don

know what that's going to look like for you in the future. Yeah, and I think the rental income there, the lease payments, the income from that building

could certainly be layered into an overall retirement income plan. But again, multiple streams, multiple sources of income

Because quite frankly, when we talk about diversification, You mentioned the real estate on our personal side here, Janet

A lot of the reason that I wanted to do that was because I felt like I was too heavily

concentrated on the stock side, right? Yeah, yeah. The liquid investment side

You don't want it all in one place if you can do that. I like the idea of diversification

So I think we're talking about it the other way here. Right. For Tina, do you have some allocations to stock, to bond, to other asset classes that can

be more liquid and it can provide you monthly income? because that's really the retirement problem is an income problem

It is not an asset problem. Assets create the income, but the overall plan has to be solving for replacing your paycheck

replacing your business income, whatever it is you're doing during your work life

you're going to have to create an income stream in retirement at some future date

and it has to come from all of those sources. And that's how planning at GenWealth works

And if anybody is getting close to that retirement, red zone, which we would define as five to 10 years out from retirement, or if you're right

on the doorstep and you need to walk through that planning process and determine, here's what I've

saved here what I accumulated how do I turn that into a monthly income stream The Gen Wealth ready to Retire Process is what you need to walk through And you can do that with an advisor You can get the

planning started by calling 866653 plan. It's 866653-7526 to start the process of going through the Gen Wealth

Ready to Retire Process. If you like to learn a little bit more about real estate, you know

We talked about the office space challenge that many people didn't come back from COVID

There are still other opportunities potentially in real estate. And what are the opportunities in the economy in 2024

And as we walk up on our final bell, I'll just make this part of my final thought

Then we'll go to you and then I might have another final thought. And we might close the show. We're going to do it

It's Valentine's Day, right? It's fine. We did an entire webinar that you can get for free

It's called the Economic Outlook 2024, a path through the forest. And one of the things we talk about is real estate

Now, we're not talking about hard owning buildings, hard real estate. We're talking about real estate investment trusts

We also talk a whole range of other types of investments and where potential opportunities may be in investing

and where we think the economy is headed in 2024. If you'd like to get signed up for that

to check out Outlook 2024, because it will be very soon. It will be available

get ready for the future.com forward slash outlook and you can sign up or you can even do

a simpler way is to text the word outlook to that number I'm always giving out

501 381 5281-5228