A Time and Season for ChangeWith nearly 80 million baby boomers approaching the estate planning phase of their wealth cycle, the focus has shifted from wealth accumulation to wealth distribution. If you are an investor that owns rental property or other types of investment real estate, you are likely in a season of life where it's time to transform highly appreciated and actively managed property into a more secure and reliable form of passive income.  Income that can be used to fund home care, health care, charitable giving, and other lifestyle expenses.  According to the US Census Bureau, nearly 60 percent of all residential rental property is held by senior investors. Most properties are older, requiring hands-on management and ongoing capital expenditures. Further, the children dont want the burden of property management or responsibility for selling properties after the parents have passed. Now, facing a crossroad, older property owners desperately need an exit strategy. Section 1031 of the Internal Revenue Code states that any taxpayer who sells property held for investment purposes or used in an active trade or business can defer taxes provided that sales proceeds are reinvested into one or more qualified replacement properties. While tax deferral is a critical component, it does not solve the bigger issue of eliminating property management. Fortunately, there is a solution that combines 1031 tax deferral with diversified property income and simplified wealth transfer.     In 2004 the IRS approved a co-ownership structure known as the Delaware Statutory Trust or DST. DSTs are pre-structured, cash flowing property interests that allow smaller investors to acquire a fractional interest in larger Class A multifamily residential and commercial properties. With low minimum investment requirements, multiple DSTs can be combined to create diversified portfolios with professional third-party management. Sample properties include Class A apartments, senior housing, medical and healthcare facilities, industrial properties, self-storage, and U.S. government leased properties. DSTs also offer flexible estate planning strategies for target date liquidity needs and transfer of beneficial ownership to the heirs.        As the baby boom generation prepares for the greatest wealth transfer in history, it is critical to preserve assets through strategic tax planning and income protection.  A carefully planned portfolio of DST property investments can compound wealth through 1031 tax deferral and generate passive income for living, giving, and legacy estate planning. Senior real estate investors have worked a lifetime for Return-On-Investment and now it is time to experience Return-On-Life!  Contact Petra Capital Properties to learn how you can unlock financial freedom and finish life well through 1031 tax deferred DST passive property investments. Editors Note: This article was submitted by Brad Watt, Founder & CEO of Petra Capital Properties. He may be reached at 719-649-7770 or by email at bradwatt@petracapitalproperties.com For more information visit: www.PetraCapitalProperties.com *Distributions are not guaranteed. Securities offered through Saxony Securities, Inc., Member FINRA/SIPC

When I speak to insurance professionals, many think that a client needs to be seriously ill, or well into their 80s or 90s for a life settlement transaction to take place. As one recent broker said, Lisa, buyers are only looking for clients who have one foot in the grave, and one foot on a banana peel, right? Nothing could be further from the truth! The life settlement market has become much more flexible in terms of the types of clients whose policies are being sold.Traditional thinking is that clients need to be older and sicker to sell their life insurance policy. While it is true that the shorter a clients life expectancy is, the more value that policy will bring in the life settlement market. Generally, the investor groups who buy policies are looking for clients with 10 to 15 years of life expectancy, or less.The older a client is, the healthier they can be to fit into the life expectancy window. You may have seen some advertising that states clients need to be age 70 or older with a $100,000 face value policy or higher to qualify for a life insurance settlement. In reality, there is no minimum age that a client needs to be to qualify. However, the younger a client is, typically, the more health impairments they need to have to fit into the life expectancy window. These guidelines reflect the traditional life settlement market, and to be transparent, this is where the majority of policy sales take place.However, it may surprise you to know that we routinely sell life insurance policies for clients who are in their 60s, and sometimes their 50s. And yes, some of these clients have significant health issues, to fit into the life expectancy window described above. But, many dont, and are fairly healthy. This means that many more of your clients can qualify for life insurance settlements than you may have previously thought.Here are two examples of younger, healthy clients that sold their policies:1) 57 year old man with a $3,000,000 UL policy. There is no cash. He no longer wants the policy and is going to drop it. He rarely goes to the doctor, and the most recent medical records showed him to be healthy. However, he was applying for new coverage and the paramed exam for the new policy showed elevated A1C. That is it. Everything else was perfect. The policy sold for $30,000.2) 61 year old man with a $10,000,000 term policy. This gentleman sold his company and didnt need the key-person policy any longer. He was going to drop it and walk away with nothing. The policy was still convertible. He had minor health issues, and a long life expectancy. The policy sold for $75,000. In addition, the referring advisor retained conversion commission on the converted policy. Yes, in both of these cases the policies did not sell for much, relative to the face value, but at least they sold. The clients are happy. They both were going to walk away from the policies with nothing.As you can see, both of these clients are young for the life settlements market, and more importantly, relatively healthy. The referring insurance agents are also happy. They received commission on the sale, as well as an opportunity for additional product sales to their clients.So, keep your eyes open for younger clients, especially if they have convertible term policies and higher face amounts those over $1,000,000. Most financial and insurance professionals would not think these types of policies could sell, but as stated before, the life settlements market has become more flexible, thanks to more investor money flowing in.The moral of this story is whenever you have a client that no longer wants, needs or can afford their life insurance policy, and they are going to lapse or surrender it, consider a life settlement. True, this is not a solution for clients who are 30 years old and running marathons. But, a life insurance settlement can be a solution for more clients than you may think.

If you save and investfor decades, youd like to know you can retire without financial worries.Nonetheless, you still have to be aware of some threats to a comfortableretirement and how to respond to them.These threats include: Inflation Inflation has beenhigh recently, but even a mild inflation rate can seriously erode yourpurchasing power. In fact, with just a 3% inflation rate, your expenses could doublein about 25 years and your retirement could easily last that long. So, if youregoing to rely on your investment portfolio for a sizable part of yourretirement income, you will need to own a reasonable number of growth-orientedinvestments, such as stocks or stock-based funds, whose potential returns can equalor exceed the inflation rate. Excessive withdrawals Once you retire, youshould establish a withdrawal rate for your portfolio an amount you can takeout each year and still feel secure that you wont run out of money. Some peoplemake the mistake of withdrawing too much, too soon, once theyre retired. Yourwithdrawal rate should be based on several factors, including your age at retirement,the size of your portfolio and the amount of income you receive from other sources,such as Social Security. A financial professional can help you determine awithdrawal rate thats appropriate for your needs. Market volatility The financial marketswill always fluctuate. When youre still working, this volatility may not besuch a problem, as you have years or decades to recover from short-term downturns.But when you retire, you dont want to have to sell investments when their priceis down. To help prevent this, you can tap into the cash in your portfolio, assumingyou have enough to cover several months worth of living expenses. You could also draw on a CD ladder a group of CDs thatmature at different times to provide you with resources for the next fewyears and allow your equity investments time to recover their value. Unexpected costs You had them when you were working, and youll probably have themwhen youre retired: the furnace that breaks down, the car that needs a majorrepair, and so on. But if youve established an emergency fund containing ayears worth of living expenses, with the money kept in a liquid account, youmay be able to ride out these costs without jeopardizing your investmentportfolio. Be sure to keep these reserves separate from your typical day-to-dayaccounts to avoid the temptation of spending your emergency money. Health Retirees may face more health concerns thanyounger people, and those concerns often come with larger medical bills. Thatswhy its important to maximize the benefits from Medicare or your MedicareAdvantage plan. Also, if you contributed to a Health Savings Account (HSA)while you were working, and you havent depleted it, you can use the money inretirement. As long as the HSA funds are used for qualified medical expenses,withdrawals are tax- and penalty-free, and wont be included in your income. Thiscould help keep your income below certain levels, lower your Medicare premiumsor avoid the 3.8% surtax on net investment income that can be assessed on high-net-worthtaxpayers. Retirementcan be a pleasant time in your life and youll enjoy it more if youre preparedfor the challenges that face all retirees.     Chad Choate III, AAMS   Bradenton's Riverwalk   828 3rd Ave W   Bradenton, FL 34205   941-462-2445   chad.choate@edwardjones.comThis article was written by Edward Jones for use by your local EdwardJones Financial Advisor.Edward Jones, Member SIPC