Passive income are preferable for retirement accounts as most often, account holders just don’t have the extra time to monitor yet another investment fund.
Los Angeles, CA (PRWEB) September 18, 2014
Since most people work a 40 hour work week to make a living, when it comes to retirement planning, Sense Financial recommends passive income, which means a source of income that a person doesn’t have to work for.
Passive income are preferable for retirement accounts as most often, account holders just don’t have the extra time to monitor yet another investment fund. This is especially true for a retirement plan for self employed, whose owners have a business to run. There are many ways a person can generate passive income within their retirement accounts:
- Saving interest: The simplest form of passive income is known by most people. Account holders put their money into a saving account, and then wait to collect annual interest from it. This interest rate, however, is usually minimal. While the money seems to grow, account holders are recommended to take into account the inflation rate and other costs and fees. If the rate is too low, the retirement account will actually lose value over time instead of growing.
- Stock dividends: Most often seen in traditional retirement plans, stocks can potentially grow the funds with increasing intrinsic value over time. Dividends are also considered passive income that can be collected regularly. The only drawback with this source of passive income is that it is unpredictable. No one can guarantee for sure that the stock value will go up. Dividends also depend on the company’s performance, and are also at the discretionary of the company.
- Rental properties: With the introduction of innovative retirement plans such as Solo 401k, a retirement plan for self employed individuals, real estate is gaining popularity as an investment choice. Rental properties often return a high rate of return, and much more predictable.
- Trust deeds: Trust deeds are lesser known investment choices, especially when it comes to retirement accounts. Sense Financial recently partners with Prudent Consulting to educate more investors about the benefits of adding trust deeds to an investment portfolio. This is an excellent source of passive income for a retirement plan for self employed individuals because the return is definitely predictable. The payment amount and schedule is specified upfront and investors can collect payments even if the property is vacant.
Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.
To learn more about retirement plan for self employed or other solutions they provide, please visit sensefinancial.com