The Best and Worst Cities for Retiring with a Real Estate IRA

USA Today recently released its list of the best and worst cities for retirement, and the results are in: according to the newspaper, Pittsburgh, PA is the best place to retire, followed by the Boston metro area and the Los Angeles metro area. Although many investors are familiar with these lists, we at American IRA wanted to go a step further: what might be the best place to retire with a Real Estate IRA—and would that list differ from what you see in the news?

How to Gauge the Best Places to Retire with a Real Estate IRA

The first question is simple: how does one determine what makes a great place to retire in the first place—particularly when it comes to Real Estate IRAs? There are the obvious demographics, such as home prices. But that alone doesn’t tell the whole tale. One area with inflated home prices might be far inferior to another area with prices that are still low relative to the value of the real estate.

The key is to consider the full range of variables here, including:

• Crime levels. An area with a high rate of crime tends to inhibit the potential for real estate growth, even if the other statistics are strong.
• Weather. A great local climate is always a way to attract new investment and renters, which in turn creates a built-in demand for the local real estate.
• Tax burden. For anyone living on a planned or fixed income, the tax burden is an essential variable to consider. A high tax burden can have enormous fallout, especially with large estates where one percentage point can represent a large portion of money. Property taxes are just as important to consider, because they can affect the perception of property in a locale.
• Health care. Access to quality health care is important not just because health facilities create high-quality jobs and attract highly-educated workers, but because old age puts you at higher risk for health complications. Those retiring with or without a Real Estate IRA would have to consider access to good health care an essential variable.

Given this information, there’s a good chance you’ll find that areas like Pittsburgh and Boston—highlighted in the USA Today article—stack up strong. But that’s not the only consideration for those with a Real Estate IRA, either.

What Makes a Real Estate IRA so Attractive for Retirement?

The reason a Real Estate IRA can be so potentially attractive for future retirees is the same reason real estate investments are so attractive themselves—they create opportunities for tremendous growth, particularly if you find yourself in a hot area with plenty of demand for quality rental real estate.

The protections afforded by holding real estate within an IRA can also dramatically expand the potential returns for anyone putting aside money for retirement. While it’s not possible to live in a house you hold within a Real Estate IRA, there are other advantages to these tax-protected accounts that make them tremendously beneficial, particularly if you live in an area with lots of real estate buzz, like Pittsburgh.

The tax protections possible when investing in an IRA are tremendous, but they also require knowledge of what the IRS requires and what your own responsibilities will be. For those who are considering where they might want to retire, it’s important to ask questions about specific locations, taking all of the variables listed above into account. For more information on how Real Estate IRA plans work, be sure to contact us here at American IRA at 866-7500-IRA.