By Michael Kachadoorian, MBA, Senior Living Expert

When the economy takes a downturn, it’s more important than ever to make wise decisions to protect your assets, prudently invest your hard-earned money, and keep up with the cost of living.

Especially considering that Social Security rates are predicted to flatline for the next three years, with no cost of living increases, selling your home and channeling those funds into interest-bearing investments could be the best way to increase your monthly income and keep up with the cost of living. According to the Congressional Budget Office Website (as of April 22, 2009), inflation will dip so low that Social Security recipients will not qualify for annual increases in 2010, or likely for two years after that.

Despite the state of the economy, this may be a better time to sell your house than you may think. The truth is that staying in your house could actually be costing you money, especially as energy costs rise. The equity that you have in your house, if invested in safe, interest-bearing investments, could be generating more money that you could use to further enjoy your retirement!

This may actually be a better time than you think to sell your home. The Pending Homes Sales Index, based on the number of real estate contracts signed, has been on the rise in 2009, up several points as first-time home buyers take advantage of low interest rates and home-buying incentives, including an $8,000 tax credit. Also, home prices are holding steady in Westminster. The median home sales price in Westminster, at $190,750, is only down 2.2% from one year ago (according to www.trulia.com, June 2009).

The Safest “Recession-Proof” Ways to Invest Your Hard-Earned Income!

Especially in challenging economic times, it’s important to be sure that you are making safe and wise investments to protect and grow your hard-earned income. The following are a few of the “safest bets” for investing in your retirement years.

CDs – CDs generate a guaranteed rate of return, and are FDIC-insured. With rates currently ranging from 1.85% to 3.50% for the highest yield CDs locally (and up to 3.75% nationwide), you can get a nice return that well exceeds what you would get from a standard savings or checking account, without risking your hard-earned money.

Here are some of the latest high-yield rates published by www.bankrate.com for Denver, CO area banks:

In addition, those willing to shop around for the best rates nationally and buy online can find 1 year CDs with no minimum deposit and 2.30% APY return (Ally Bank of Midvale, Utah), or 5 year CDs at Third Federal Savings and Loan yielding a 3.75% annual return (rates courtesy of www.bankrate.com).

Fixed Annuities – Fixed annuities are another wise and safe option. One subset in particular of fixed annuities, charitable gift annuities, can bring in a guaranteed return of at least 5.25% and up to 9.5% for those above 90 years of age, according to the American Council on Gift Annuities. Charitable gift annuities are essentially contracts with a charitable organization in which a donor gives a gift, and receives a lifelong fixed payment of a certain guaranteed interest rate in return. These payments are partially tax-deductible. Benefits of a charitable gift annuity include:

• fixed income for life

• income tax charitable deduction

• deferred capital gains

• diversified concentration of assets

• simple to implement

• benefits the region

These rates are recommended by the American Council on Gift Annuities and are re-determined periodically.

How Moving to a Retirement Community Could Actually Save You Money

Selling your house is one of the ways to generate more money to re-invest. And it could lower your cost of living, surprisingly. Have you ever considered that you might actually SAVE money if you moved to a rental retirement living community?

If you have any hesitation about moving to a senior living community, especially if you don’t think you can afford it, please consider the following. If you own a house, you may be able to generate an extra $500-$1,000 in income per month by selling your home and wisely investing the built-up equity.

As a home-owner, you are likely also paying real estate taxes, property insurance, heat and air conditioning, light, water, and property up-keep expenses. Many of these expenses are “variable,” and as gas and electric prices rise, heating and air conditioning bills go up as well! Maintenance, fixing plumbing issues or a hot water heater, can be unpleasant surprises which can strain the budget. These expenses will be covered in your inclusive monthly fee for an independent or assisted living apartment .

“Health is Wealth” – Investing in Your Health Is Also Investing In Your Future!

Moving into a senior living community can have further benefits. Numerous studies have shown that regular exercise and social connections are vitally important to maintaining your health as you grow older. A rental retirement community, with a wide range of life-fulfilling exercise and social opportunities, can help you stay independent and healthy as you age.

And in a real estate market where home sale prices and values are still holding steady, as is the case in Westminster, you can increase your monthly income and overall retirement portfolio by selling your home and reinvesting your hard-earned money in safe and guaranteed interest-bearing CDs or annuities.

I hope these tips have been useful! Please invest wisely to make the most of your retirement years.

Michael Kachadoorian, MBA, is a recognized expert on senior living with more than 15 years of experience in the industry. He is currently Senior Vice President of Marketing at The Roche Associates, Inc., a nationally recognized planning firm specializing in the senior housing industry.