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In today’s world where we constantly strive to blend in and just go along with the rest of the group, here is one uncommon thought and a powerful one, to cherish thinking differently and to value different perspectives.

Do not fear to be eccentric in opinion, for every opinion now accepted was once eccentric.
- Bertrand Russell

Today, we continue with part 2 of the interview with Mark Lederer. Mark is a real estate advisor. Mark works with his wife Katie as a team and they are located in the Bay Area in California. They have been top performing agents in the area for the last 6 years. Also, as you read through this interview, it is probably a good idea to keep in mind that this team has been practicing the approach listed below for a number of years and have helped many clients with this approach.  Mark also has a blog on financial matters and is aptly named Financial Ambition whose aim is to bring you uncommon knowledge related to financial matters.  

Our readers should also note that Mark participates on the Boomer411.com as a Trustee, in this role he joins other trustees to help select quality content (articles) to be indexed on the Boomer411.com web site.

You can find part 1 of this interview that was published last week here. Now let’s get started with the final part of this interview.

Boomer411:  What affordable housing options are there, especially for singles and those that prefer communities reserved for elders/seniors?
Mark:  Each community is different in what they provide and each individual needs to evaluate their concerns before looking for alternative housing. For instance in the Bay Area, some housing communities offer comprehensive medical and assisted living coverage with admission to the community. If the client has big concerns about their medical and insurance situation then this may be a favorable alternative for them. When deciding to sell your home and move to a retirement community it is first important to assess and reflect on your situation. A good team of real estate, finance and insurance advisors can be valuable for assessing a client’s risks and opportunities.

Boomer411:  How should Boomers (or anyone older than 45 years) organize their efforts and address such emerging trends?
Mark:  Trends are just that… They are trends that I find often have nothing to do with a clients personal and individual situation. Since each of us has unique situation, it is imperative to reach out to specific professional advisors for advisor ship. Looking at trends is often a mistake when considering a strategy for an individual. For by definition 50% will most likely do better than the general trend and 50% will do worse. For instance, looking at trends surrounding the low national average savings that the Baby Boomers have accumulated, has no direct impact on an individual’s situation or the strategies they should use in retirement. Thus, getting expert help to define and plan one’s individualized life in retirement is paramount.

Boomer411:  If a person is closer to retirement but is unable to decide where to retire, is it advisable for that person to buy property in a most likely place he or she would retire? How should that person go about real estate planning?
Mark:   Real estate planning is just one piece of an estate plan. I would never advise that someone should haphazardly sell or buy real estate.  When considering where to retire there are many more concerns that need to be addressed than just the financial and estate plan concerns. I find that many of my clients who are retired decide they want to be closer to family. This proximity to family may mean increased living expenses if they are moving from Oregon to California. I suggest that all of my clients take time to reflect on what they think living a good life in retirement means specifically for them. Then, we get the necessary experts involved to assess the risks and opportunities of their specific situation. This allows for the client to make an informed decision of how they want to live. I often find that clients come to me with ideas that are not even possibilities. I prefer that clients contact me well before they decide to make a move so that I can help them reflect and prepare for changes they are going to make.

Boomer411:  On average how many Boomer or elder clients do you service? How do you cater your services to the many different situations you encounter with baby boomer clients?
Mark:  I would say that about ¼ of our transactions are with Baby boomers. We expect that portion of our business to grow over the next couple of years. Again, not every nail needs a hammer so we like to cater our services to the situation of the individual, and not to a class of individuals such as the Baby Boomers. It is faulty logic to assume all Baby Boomer’s are in the same boat. I have found that Baby Boomer’s concerns are as diverse as the concerns of the X-Generation clients I also service.

Boomer411:  Do you provide additional services to the boomers that you do not need to provide to others?
Mark:  I have found that there are core services that all clients need to have a successful real estate transaction. All clients need good real estate, mortgage, finance, and insurance assistance. It is important that all these providers work together to assist a client in reaching their goals. The boomers also often need assistance with retirement planning and wealth conservation. The biggest mistake I see that Baby Boomers make is to assume that they will only live for so long. For instance, I often hear people say that they will not live past 90. This philosophy means that they often plan to run out of money at age 90. I often say to this individual, “If you end up living to age 100 the last 10 years of your life will be brutal!” I advise that people plan to live to an absurdly old age, so that they never have to worry about their estates drying up.

So, in a way the services and the philosophies of financial conservation and living a good life apply to everyone, Baby Boomers included. On the other hand, Baby Boomers often need assistance with assessing alternative living situations such as skilled nursing facilities. I think having a good team of experts means that as a team they can help with assessing even the most complex situations regarding all parts of a real estate transaction. Many Realtors® look at their job as guiding clients through the buying and selling of real property. That’s why I look at myself as a real estate advisor. As an advisor you need to care for a client’s total concerns. This philosophy implies that they are in a better situation after the transaction than before it. It is not possible to have this high standard of care without a team of experts working together.

Boomer411:  What ancillary services do you provide to support a Baby Boomers real estate situations?
Mark:  We supply support in mortgage, finance, retirement planning, wills & trusts, insurance, life style planning, architects, architectural programming, interior decorating, and property contractors.

Boomer411:  What consequences are there for boomers that do not take care of their real estate concerns?
Mark:  I can see truth in the saying, “You can’t eat real estate, but real estate can eat you.” This means that it should be carefully assessed within the context of your total estate. Baby Boomers just like anyone else who owns real estate face a menagerie of financial, legal, insurance, and lifestyle consequences.

Boomer411:   Tell us briefly about your blog
Mark:  The purpose of my blog is to provide essential real estate and financial guidance to Bay Area homeowner’s whose ambitions are to live in the home that is right for their family while at the same time fully funding their retirement, their children’s college education and paying for the high costs of living the SF Bay Area lifestyle.  Our readers tend to be top 5% household income earners ($150,000+), who endeavor to purchase homes that cost $750,000+ and are committed to using their income and assets to their fullest advantage.  Our commitment is to provide valuable philosophy, research, data and opinions to assist these ambitious Bay Area homeowners.

Boomer411:  What is your outlook for the current and future real estate markets?
Mark: I think the future of Bay Area real estate is bright. Our market is so unique that I think we are well positioned for a robust future. Of course, we will see our share of up and down real estate cycles, but over all California real estate has had an average of 9.5%/year appreciation over the last 30 years. That average is about on par for the US economies S&P 500 market average over the same period. If you localize the average 30 year historical appreciation to individual Bay Area cities then some of the returns are substantially larger than California’s average. The Bay Area is a great place to own real estate. We have fantastic year round weather conditions, lots of economic and business growth, and a limited supply of land to build on. I think this all adds up to be advantageous for Bay Area real estate owners and investors over the next decade.

Boomer411:   Any further insights?
Mark:  Be careful when making your next real estate transaction. Demand that your real estate agent look at your complete financial picture when giving advice. Make sure that your agent knows their limits and gets you good help when the conversation strays from their expertise. Take time to reflect on your next transaction and make sure you are moving towards living the best life possible. We are each individuals with different situations that require unique strategies. Make informed decisions, because the consequences could be substantial and irreversible.

This concludes our interview with Mark Lederer. Stay tuned for more such interviews.

SHIPtalk is a website from SHIP. What is SHIP? In case you didn’t know, it stands for State Health Insurance assistance Program. According to their web site, “it is a national program that offers one-on-one counseling and assistance to people with Medicare and their families. Through federal grants directed to states, SHIPs provide free counseling and assistance via telephone and face-to-face interactive sessions, public education presentations and programs, and media activities.”

SHIP is run in each state individually in the United States and thus is customized to the state programs, needs and diversity of the population. There are over 12,000 counselors; they have helped more than 2 million medicare beneficiaries. SHIP helps people with their medicare, medicaid, long-term care related insurance needs. Their counselling sessions are provided free of cost through federal grants and can also be accessed over the phone using a toll free number. Check their website to find a counselor or toll free number near you.

Even if this information may not be needed for you, someone you know might benefit from their services. So please do pass this information to such people.

Let’s all be safe, healthy and secure and help those around us to be safe, healthy and secure as well.

As the 2008 Presidential Elections are approaching in the United States, it is important to consider what each of the candidates are offering, proposing to do to revamp the backbones of the country’s retirement and health systems, such as social security, medicare, taxes, etc. This newspaper article gives a roundup of the stand taken by some of the candidates regarding these issues.

The president elected this year will play a crucial role in shaping the direction of these systems at an important moment in the history of the nation, as Boomers start retiring. A review of the candidates’ stand reveals some interesting proposals such as basing the social security benefits on the inflation rate rather than the wages, raising income tax exemption limit to $50,000 for seniors, writing new laws to prevent companies from reneging on their pension promises to abolishing the current system of federal taxes and implementing a simplified fair tax or use tax system, socialized health care, etc.

Also, be sure to visit candidate’s website to review their stand on health, retirement issues in detail before you decide on whom to vote for.

Today, in our series on interviews, we are featuring an interview with Mark Lederer. Mark is a real estate advisor, as opposed to a real estate agent and you will find out why in his answers below. Mark works with his wife Katie as a team, in the Bay Area of California and they have been top performing agents in the area for the last 6 years. Also, as you read through this interview, it is probably a good idea to keep in mind that this team has been practicing the approach listed below for a number of years and have helped many clients with this approach.  Mark also has a blog on financial matters and is aptly named Financial Ambition whose aim is to bring you uncommon knowledge related to financial matters. The interview is being published in two parts. Today we are featuring part 1 of this interview. Part 2 will be published next week. So stay tuned.

Our readers would probably be interested in learning that Mark also participates on the Boomer411.com website as a Trustee, in this role he joins other trustees to help select quality content (articles) to be indexed on the Boomer411.com web site. Mark, on behalf of Boomer411 and our readers, Thank You.

Now let’s continue with the interview.

Boomer411: Mark, Please tell our readers about yourself and your professional practice (Where do you work?)
Mark: I am a Realtor and a real estate advisor located in Berkeley, California. I service the Bay Area and handle real estate transactions for buyers and sellers of residential and investment real estate. I work at the largest independent firm in the East Bay. I work as a team with my wife Katie. We have been top producing Bay Area agents for the last 6 years.

Boomer411:     What are some of the major concerns (explicit and/or implicit) facing Baby Boomers today and how do you deal with them?
Mark: When I meet with Baby Boomers I find, as with all of our clients, they need help assessing their current situation and their future real estate needs. Specifically for Boomers retirement and financial security are of most importance. Like with all of our clients this means that Baby Boomers face challenges in many different areas when deciding to purchase and sell property.

Boomer411:     Are Baby Boomers concerns different from other people that are aging and older than boomers? Please explain? What kind of help do Baby Boomers need when considering selling or buying real estate?
Mark: All of us are looking to conserve our time, energy and money when transacting in real estate. Yet, because the Baby Boomers are closer to retirement age they have heightened concerns for their well being. Thus, it is important to look at all angles of the transaction and get a clear picture of what needs to transpire in order to insure a smooth transition. For instance, Baby Boomers have financial constraints that may be more pronounced, because they are reaching retirement age and the mechanics of the time value of money has less time to work for them.
This means good financial advice is paramount to a successful transition from one home to another or in dealing with the liquidation of investment property. Since we are not financial advisors good real estate agents must keep a good financial advisor in the loop of the transaction. This means that both the financial advisor and the agent must work closely together to make sure the Baby Boomers financial interests are preserved. This often brings in tax, legal, and mortgage questions that must be addressed properly to satisfy the known and unknown concerns that the client may have.

Boomer411:    How do you approach the fact that a home is often your client’s largest asset?
Mark: I do not accept that our client’s personal residence is or should be their largest asset. For instance, a good ambitious marriage is a much larger asset than a home. A marriage provides much more than just finance. We also see that divorce is a leading destroyer of accumulated wealth. I have seen clients at retirement age, when their savings accounts are smaller than their personal residence.  This usually ends up in an unsatisfactory situation. A home should not be one’s largest asset, because if it is then they will be sure to make unwanted compromises when they retire.
Again, as stated in question 3, having a team of advisors that understand the concerns of the specific individual are vital. It is especially paramount when working with a client where their personal residence is their largest asset. It is always best to find a comprehensive approach to understanding and developing a strategy for retirement. It is a task that requires much cooperation and coordination between many different experts. This means in retirement your home must provide much more than just a roof over your head. Often we have seen how this change is a process of utilizing experts in many different fields to investigate alternatives and help our clients reflect on what is the best situation for them.  

Boomer411:    What should baby boomers (or any elder person) do first when considering selling or buying property?
Mark: The first step is to locate a real estate agent that understands the situations that Baby Boomers face. A good agent will have a team of experts to advise their clients through the process of buying or selling property. Expert advice is key to any successful transaction and it is a must for Baby Boomers that are setting the stage for retirement. Below are 8 steps that I guide my clients through when buying or selling residential or investment property.

1. You should start with your real estate advisor who should assess the current value of your home. These numbers will help all of your other advisors while they assist you in assessing your entire situation.
2. Your real estate advisor should assess the current real estate market conditions in your area. This will help you to gauge the risk and timing of your transaction.
3. Your real estate advisor should listen to your concerns for your family, work, career, socializing and retirement.
4. Your real estate advisor should provide you with other advisors that understand and can help you to assess all of the financial, insurance, tax, and legal concerns you may have. They should cooperate and coordinate with these ancillary services to get a clear picture of your total situation.
5. Your real estate advisor should provide a collaborative environment where you can reflect on your situation and consider all of the alternatives available to you.
6. Once you understand the situation you should work with your agent to explore the future situation you would like to create.  If you are deciding to move out of the area, this may mean utilizing another agent in a different market. Your primary agent should help you to find a good real estate advisor in an alternative location if needed and to cooperate and coordinate with this other agent to ensure continuity.
7. When you proceed with the sale or purchase you should have good communication with your agent. They are advising you throughout the entire process. Because the process of buying and selling requires that both a buyer’s and a seller’s expectations are reached, no real estate advisor can fully define your process with certainty. Your advisor should be constantly assessing your situation as it progresses and should be working with your other advisors as the process changes. It is a constant process of making assessments and then adjusting the process in a way that best meets your needs.
8. After the transaction is completed, your real estate advisor should provide you with any additional support (for example interior designers, architects and contractors) as needed. They should be willing to take a vested interest in you even after the transaction has been completed.

Boomer411:    What trends do you see in regards to retirement and real estate? Is “aging in place” or “retiring in place” a phenomenon in theory or happening more?
Mark: There are lots of new trends that are appearing in real estate in regards to meeting the needs of the many Baby Boomers that are beginning to think about retirement.  Some of them revolve around reverse mortgages, which allow people over the age of 62, who have equity in their homes, to stay in their homes while providing an income stream and/or reducing their payments. Many of my clients own large homes where they raised children who are now grown. These clients often are looking to downsize and we often deal with advising our clients on the transferring of their tax basis.  The Bay Area is a diverse group of individuals with many differing financial situations. Thus, it is imperative to look at each individual’s unique situation and help them to make the correct decision for them.
 In essence not every nail needs a hammer.  Thus, the trends are irrelevant to the individual’s concerns. In general, there are a lot of people in this country reaching retirement age. Many of them will be assessing their current living situations as they decide to retire. Many of them will need expert assistance to help make sound decisions regarding, housing, mortgage and finance. A good advisor will not apply common knowledge to these individuals, but instead use uncommon knowledge to assist each unique individual’s needs and concerns.

Boomer411:    If one lives in a high-tax or retiree unfriendly (or less friendly) state, what can one do to reduce or control retirement expenses? What factors should one consider if deciding to move to a retiree friendly-state?
Mark: Anyone who is considering moving out of state needs a team of advisors on both ends of the transaction. One set of advisors on the sales side of the transaction and another on the purchase side of the transaction to assure continuity. For example a real estate agent in California cannot adequately advise on real estate market conditions or strategy in Colorado. Each of these locations is unique and in need of a strategy that fits the uniqueness of each of the situations. You must make sure that both of the real estate agents work together with all of your other financial and legal advisors.
More often in California we see that people over the age of 55 years old, can transfer their tax basis from one home to another. The laws surrounding this exchange are complicated and require that the real estate agent take a look at the individual’s total financial and lifestyle perspective when considering the viability of this option.
This concludes part 1 of our interview with Mark Lederer. Stay tuned for part 2 of this interview to be published next week.