For those concerned about retirement finances, "The Myth of Social Security"  by Thomas G Donlan  in a recent Barron's should be a cause of great concern.Private Mortgage Notes  The recent interview with Shaun Cohen, President of EquityBuild Finance, the funding arm of EquityBuild, a real estate investment firm, offers comfort for retirement planning in the details provided about the performance of private mortgage notes an asset class.

 In his Barron's piece, Donlan focused on the funding of Social Security.  While there were serious doubts raised, the finances of Social Security can be fixed fairly easily.  That is not the same for Medicare, however, the health care program for senior citizens.  The finances of Medicare require a substantial amount of help.  Health care costs are a huge expense for retirees.

Where there is significant assistance for individuals in financing retirement needs in meeting medical expenses and other costs is from private mortgage note investing.  Private mortgage notes are loans made by investors to those seeking to buy properties.  Many times traditional lenders such as banks, credit unions, and mortgage brokers cannot meet the needs of those seeking to purchase real estate, so there is always a demand for private mortgage notes.

Interviewed for a recent webinar presentation, Cohen noted that private mortgage notes have returned an average of 12%.  At that return, the initial investment will double every six years.  Yields like that are very useful for taking care of retirement needs.

In addition to the high yield, investors in private mortgage notes provided from EquityBuild Finance have enjoyed low risks.  There have been zero defaults.  It is very rare to find an investment with that high of a return and that low of a risk.  There is also maximum flexibility, as the terms of private mortgage notes are completely up to the lender and the borrower, so long as the provisions are legal.

These returns can be made even more formidable by holding the private mortgage notes in a retirement account, such as an individual retirement account (IRA).  With a zero percent default rate, there is certainly the security one desires from an asset providing for retirement funding.  Being held in a retirement account results in the income or capital gains from a private mortgage note being tax free.  For the owners of a private mortgage note, the investment income is tax free.  Should it be sold for a profit, there are no taxes on the gains, so long as it is part of a retirement account.

While Donlan's article in Barron's was certainly well-written and well-researched, it is more than likely that Social Security will survive.

But the monthly check from Social Security, now an average of $1262, is not that much money.  The double digit return from private mortgage note investing will add a great deal to an enjoyable retirement lifestyle. Passive investing with a long term approach is the best way to maximize the profits to be earned from investing in private mortgage notes.