"It seems like retirement is a good place to be"

Devon Gorry, an assistant professor of economics at Utah State University, said this in an interview on TODAY. She also noted that retirees were happier on average and less depressed.

Gorry is co-author of a study published this month by the National Bureau of Economic Research. The results are based on data from the Health and Retirement Study, which contains in-depth interviews with 20,000 Americans over 50 on every aspect of their lives, including physical and mental health. Researchers follow up with them every two years until their deaths.

The report found that retirement quickly boosts life satisfaction, with meaningful improvements in health showing up a few years later and has long lasting benefits to individual well-being.

Click here to read the full scope of the study, Growing Older in America: The Health and Retirement Study.  

Before buying that dream vacation home …

Vacation-home salespeople dangle the lure of rental income in front of buyers like a fresh worm in front of a hungry bass. So it’s no surprise that in a survey by the National Association of Realtors, 92 percent of vacation-home buyers said they planned to rent their property within 12 months, and 76 percent said the potential for rental income influenced their decision to make the purchase.

What’s more, many pre-retirement-age folks are taking the opportunity to purchase a high-end second home at a more affordable price now and rent it out until they retire.  

Please don’t buy a vacation home thinking it’s a great addition to your real estate rental portfolio. I have never seen one that was. Buy it because you want a nice place to spend some time. Any rental income should be considered extra cash to help offset your expenses.

If you think this is for you, check the HOA’s rules to ensure short-term rentals are allowed. And don’t forget that there may be expenses that you don’t have with your other rentals, such as hotel-occupancy taxes, maid service, and management-company fees. Also your insurance company may require special liability coverage renting out a luxury property.

Gonna go in with some friends on the deal? Maybe you’ve taken vacations with them, had a great time, and get along well. What could possible go wrong?

A lot … for instance who will use the home and when. Can relatives or friends of your friends spend time there? What about décor? Will one of you want contemporary while another wants rustic?

Most importantly, though, how well do you know your friends’ financial situation? How good is their credit? Could you count on them to come up with the bucks for maintenance and repairs?

Better have everything in writing — kind of like a prenup — so you don’t get stuck paying the bills. While you’re at it, include a provision on what happens if one of your friends wants to sell his or her share. You sure don’t want to end up with a stranger as a new partner. 

Retiring overseas? Don’t let FATCA bite you

Baby boomers in record numbers are looking to spend their golden years outside of the U.S. Latin America has become a popular destination. Mexico, Nicaragua, Costa Rica, Belize, Panama, Columbia, and Ecuador top the list. And in the Central Valley region of Costa Rica where I frequently travel, gringos can be found in most all of the supermarkets and restaurants.

The IRS caught wind of this trend, too, and wanted to make it tougher for expats to hide money in offshore accounts. As a result, if you are a U.S. citizen living abroad you must comply with the Foreign Account Tax Compliance Act (FATCA).  

That means attaching Form 8938 to your Form 1040 when you file your income taxes.

Here is a breakdown of which foreign assets you must report:

You only have to file if your foreign assets exceed certain thresholds, which you can find here.

Failure to report foreign financial assets on Form 8938 may result in a penalty of $10,000 (and a penalty up to $50,000 for continued failure after IRS notification). Further, underpayments of tax attributable to non-disclosed foreign financial assets will be subject to an additional substantial understatement penalty of 40 percent.

With steep penalties like those, it’s worth taking a little time to make sure the IRS’ posse doesn’t put a damper on your retirement adventure.   

How much can you make as a landlord?

Thinking about becoming a landlord? I’m putting the finishing touches on my book — What You Must Know BEFORE Becoming a Greedy Landlord — that will give you the ins and outs of what it takes to be a successful landlord.

Meanwhile, you can check out RealtyTrac’s data on average rental returns for three-bedroom properties in 285 counties nationwide. So far this year the average return is about 9%; in 2011 it was 10%. Some markets are showing an average gross rental yield of over 17%.

In the county where I live, the average yield is 8%. The highest-yielding zip code showed 13.4%. The zip code with lowest return came in at 4.9%.

These numbers provide a very rough idea of the possibilities in your area. But they’re not good enough if you’re serious about becoming a successful landlord. In What You Must Know BEFORE Becoming a Greedy Landlord, I’ll show you how to more accurately determine potential yields so you can maximize your returns and minimize the chance of making a lousy investment.

Stay tuned, and I’ll let you know when What You Must Know BEFORE Becoming a Greedy Landlord is available in print and Kindle formats. 

Study finds Baby Boomers starry-eyed

Nearly two-thirds of America's Baby Boomers plan to work for pay in retirement. However, a new study found that they are unrealistic about the compensation and work arrangements.

Click here for the details.

Couples worlds apart when it comes to money …

You might think you know your spouse’s money facts and attitudes. But when push comes to shove, you could find yourself a world apart. 

At least that’s according to a Fidelity Investments study. Click here for the study’s complete findings.

Missing one payment can get you canceled!

Do you have long-term care insurance? Then don't you dare miss a single premium payment. Click here to read how one lady missed a payment and is now fighting to get reinstated, even though she is in good health.