Begin planning for retirement

Joeann Fossland

Less than 10 percent of Realtors® are regularly planning for their retirement, according to Joeann Fossland, a national real estate speaker, trainer and coach.

“For most people, there’s a retirement plan through their job,” said Fossland, CEO of Advantage Solutions Group in Arizona. “It’s really up to Realtors® to think of their retirement and plan for it within their business plans.”

Ideally, Realtors® would think of retirement in the early part of their career. “I suggest that young Realtors® set aside 10 percent of each paycheck. Then you won’t miss it,” she added. “If you wait until the end of the year, it seems like a lot.”

It’s important to start saving early in life, then work with a financial planner to outline future saving.

Fossland believes one of the most flexible ways for Realtors® to save retirement monies is a self-directed Roth IRA. “All of the growth on the fund is tax-free,” Fossland explained. “But the best reason is that self-directed IRAs allow you to buy and sell real estate with monies in that fund. Many Realtors® believe the real estate market is safer than the stock market so they can use income from rental properties as part of their retirement plan.”

She joked that this is Realtor® insider trading. “As Realtors®, we know property values. We know that now is a good time to be investing in properties because prices are lower. And this plan can be tied into your retirement,” she added.

Fossland said Realtors® should plan to be financially independent as they approach retirement age but that saving would allow them to continue to work because they want to, not because they have to.

For Realtors® in their 40s and 50s who don’t have a retirement plan, Fossland said they may need to begin saving more aggressively. “Begin by working with a financial planner,” she advised. “Your retirement should be part of your business plan. You need to determine if you want to retire in 10 years and how much money you need to live on. What would your savings plan look like? Remember to consider if you plan to travel in your retirement.”

There are retirement planning tools available online as well. Fossland recommended T Rowe Price’s website for some initial planning.

When selecting a financial advisor, Fossland suggested working with one who charges a fee for his services, as opposed to one that gets paid based on what he sells. Financial advisors look at fixed expenses, what your expectations are, if you want to travel – it’s individualized and you need to look at your expenses and what you want to do.

To prepare a business for selling when retiring, Realtors® need to invest in business systems and databases, according to Fossland. “Work to build your business so it’s something bankable. A Realtor® needs systems in place with marketing and prospecting plans. If the business is showing a consistent monthly income and someone is able to step in, then it’s a business that can be sold,” she explained.

“It’s important to get started on planning for retirement and follow the plan consistently,” she added.