November 17, 2005
Improve the IRA - Use your money to own your biggest asset
Link : http://online.wsj.com/public/article/SB112933380245369434-F1k6DpuZiJk1ZCRnfC7NuwBiU2Y_20061015.html?mod=rss_free
The prohibition on allowing an IRA to own your personal real-estate is very, very bogus. In fact, the only difference between your IRA holding your mortgage OR your bank holding your mortgage is that the bankers get paid your money. In other words, not allowing your IRA to buy your personal residence is bank protectionism!!! Nothing more and nothing less.
I have an idea for a small improvement to all IRA's. The benefits for the improvement are:
* Increased security of retirement for individuals
* Reduced foreclosures during distressed economics times
* Increased home ownership
* Increased ability for entrepreneurship for individuals during economic low times.
I believe most of these benefits can come at NO COST to the taxpayers and with a strong POLITICAL GAIN for anyone who would champion my idea.
Here is the idea: I would like it very much if my IRA (both ROTH and/or Standard) could purchase my mortgage on my house. I would propose limitations if needed: 1) must be primary residence, 2) must be able to purchase entire mortage from lender 3) must sell at retirement. 4) must continue to make payments - but payments can be missed during hardships 5) you could think of more of course...
Finally, the genesis of this is because as a middle class worker if I'm laid off (highly likely) then I am forced to either sell my house (during bad times) or try to make my payments (horrific penalties). I think many people (errantly) choose to make payments assuming they will get back to work quickly, but doing so hurts their retirement badly. Furthermore, if the economic slump is extended, then after depleting savings AND paying penalties, they are still forced to sell their houses. Now they truly have nothing. I think if you did research they would find this to be true.
I have an idea for a small improvement to all IRA's. The benefits for the improvement are:
* Increased security of retirement for individuals
* Reduced foreclosures during distressed economics times
* Increased home ownership
* Increased ability for entrepreneurship for individuals during economic low times.
I believe most of these benefits can come at NO COST to the taxpayers and with a strong POLITICAL GAIN for anyone who would champion my idea.
Here is the idea: I would like it very much if my IRA (both ROTH and/or Standard) could purchase my mortgage on my house. I would propose limitations if needed: 1) must be primary residence, 2) must be able to purchase entire mortage from lender 3) must sell at retirement. 4) must continue to make payments - but payments can be missed during hardships 5) you could think of more of course...
Finally, the genesis of this is because as a middle class worker if I'm laid off (highly likely) then I am forced to either sell my house (during bad times) or try to make my payments (horrific penalties). I think many people (errantly) choose to make payments assuming they will get back to work quickly, but doing so hurts their retirement badly. Furthermore, if the economic slump is extended, then after depleting savings AND paying penalties, they are still forced to sell their houses. Now they truly have nothing. I think if you did research they would find this to be true.
