What you should know before deciding on a retirement plan

You have probably noticed the rising trend of choosing self-directed IRA as a retirement plan. Sure enough, statistics point to the increasing popularity of the self-directed IRA account even though it makes up a small percentage of the total funds in retirement accounts across the country. You may also have heard more than once a couple of pensioners going on about how they are tired of the traditional investment methods like stocks, bonds and mutual funds. Investments in gold bullion, real estate and cattle farms are among the options on the table when you are the owner of a self-directed IRA.

There is really nothing to lose with a self-directed IRA. You can experiment on a new investment strategy or just buy some shares from a small business that you think is resourceful; all that from a tax-deferred account. There are some rules that you have to work with, mostly in the real estate area – like you can’t deal to your own family or to yourself – but that is a small price to pay for the freedom to invest where you like.

Just like with any new job that you start, you have to be careful for a few days until you start getting the feel of things. Many people misunderstand the meaning of investing freedom and go on a spending spree only to end up with regret. The main culprit here seems to be the vast amount of choices one has after opening a self-directed IRA account. But you can use this to your advantage and make some educated guesses while using some of your own knowledge to maximize your returns.

You do of course have the option of hiring a custodian or a legal adviser to help you out in making your decisions if you are not confident enough to make them yourselves. At this point, your question shouldn’t be if but when you are opening your self-directed IRA account.

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What you should know before deciding on a retirement plan

5 Things You Need to know about Self-Directed IRAs

It doesn’t matter what retirement plan you decide is the best for you, whether it is a 401(k) or a self-directed IRA, you need to know the merits and demerits of each one so you can be satisfied with your decision. The self-directed IRA is one of the fastest growing retirement plans and there are plenty of reasons for it too. But that does not mean that you don’t have to be careful before opening a self-directed IRA account. Listed below are a few things that you should know about the self-directed IRA.

1. You can purchase almost anything using a self-directed IRA account. With the more traditional retirement accounts, your options are limited as you can only invest in stocks, bonds and mutual funds. With a self-directed IRA, you can take your pick from gold bullion, real estate, a small business, or pretty much anything. The only prohibitions are life insurance contracts and collectibles.

2. Almost anyone is eligible for the opening of a self-directed IRA account. There is no age or income limit (upper or lower).

3. You are allowed to make investments without any lower limits to your account balance. This means that you just have to make sure you have enough money in your account for the investment you want to make. You don’t have to worry about keeping a minimum balance to keep your account alive.

4. The income and profits generated in a self-directed IRA are tax-exempt until a distribution is taken.

5. You are the only custodian of the funds in your self-directed IRA account. So unlike most of the other retirement plans out there, you have “checkbook control” of your money and conduct transactions as and when you want. You will not have to wait for someone to pick up their phone just to authorize a time-sensitive transaction.

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5 Things You Need to know about Self-Directed IRAs

Does a Self-directed IRA have Extra Advantages over the Traditional IRA?

It is always a good idea to plan ahead for the future. It is quite difficult to predict where you are going to be in a few years after your retirement. It may be an equally difficult decision to make to select which retirement plan to go for to save up for a comfortable post-retirement life. Among the options available to most people are the traditional IRA, the 401(k) and the self-directed IRA. In this article, we are going to discuss whether you would be better off with the traditional IRA or a self-directed IRA.

First of all, it is important to understand the difference between the traditional and the self-directed IRA. The latter is essentially a specialized for of the former. The most well-known difference between the two is that a custodian is required for the simple IRA and your only options of investment are the conventional brokerage accounts (bonds, stocks and mutual funds). With the self-directed IRA, on the other hand, you can make your own choices on the areas where you would like to invest, including bonds, stocks and funds.

Many people consider it a risk to open a self-directed IRA account because of the possibility of losing assets by investing in an unstable business. However, such a situation can easily be avoided by you if you know a thing or two about where you are about to invest.

The catch is that the money put into a self-directed IRA cannot be withdrawn until the account-holder reaches the retirement age (59.5 years), after which the withdrawals will be subject to federal taxes. Transactions that take place within the account (profits, interest and dividends) will not be affected by any taxes. If you decide to withdraw the money from your self-directed IRA account, you will be charged a 10% fee.

Another difference between the traditional and the self-directed IRA is that the account holder cannot use the assets in their self-directed IRA for personal benefit. This means that if you are the owner of a self-directed IRA and have invested in real estate, you or your lineal family members cannot live on that property.

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Does a Self-directed IRA have Extra Advantages over the Traditional IRA?

Which is better: 401k or a self-directed IRA?

The self-directed IRA and the 401(k) fall among some of the most popular retirement plans in the country. For someone who is new to the concept, it can be quite a difficult decision to make because you never know where your choice will land you after you retire and the last thing you would want at that stage is to regret a decision you made in your early years. So the best thing to do is to study up and make the right choice.

With a self-directed IRA, you will have direct control over the funds in your account which means you do not need to hire a custodian who will conduct your transactions for you. You will not need to pick up the phone and make some calls every time you want to make a withdrawal or find a place where you would like to invest. You would do away with these luxuries if you opt for a 401(k).

Investing tax-free in real estate is considered impossible by some people. With a self-directed IRA, it is not only possible, but easy as 1-2-3. You may be able to find a solo 401(k) with which investing tax-free in real estate could be possible, but the hidden charges that would be incurred every few weeks would cost you a fortune. The self-directed IRA program has been approved by the IRS and was designed specifically for small-business-owners.

By going with the self-directed IRA, you will not only firmly secure your future and ensure a convenient post-retirement time, but also have the chance to invest in whatever business that you please increasing your odds of winning big time. Just remember to keep your common sense intact at all times and to not use your new-found freedom to invest in trying to revive a dying business. Other than the odd silly thing that people tend to do while handling large amounts of money, you should be doing fine with your self-directed IRA.

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Which is better: 401k or a self-directed IRA?

Why a Self-directed IRA is a Top Retirement Option

Individual Retirement Arrangements (IRAs) were started in the 1970s and have been around ever since. However, the focus of most companies has been firmly on market-dependent aspects like stocks, bonds and mutual funds. Because of the heavy fluctuation of the market, investors are looking for options which they can have more control over, like a self-directed IRA. A self-directed IRA is a retirement plan in which the account holder does not need a custodian to conduct transactions and has full control over all his assets. In other words, it is the perfect way to plan for your retirement.

Adam Bergman is a tax attorney and partner at a New York and Florida IRA firm. According to Adam, public interest in self-directed IRA has sky-rocketed over the past few years. There are many theories as to why this has happened but the most widely accepted one is that after the financial decline of 2008, people started to look for alternative ways to invest. After five years, the self-directed IRA has stood out as the most preferred retirement plan among them all.

With the way Wall Street had been doing, people had to stop depending on it and start looking to invest in something they had more knowledge about or were able to control. With a self-directed IRA, they had the option to invest in whatever they chose to, whether it was a friend’s business, gold, real estate or live cattle.

Presently, more than 45 million IRAs are there in the United States holding approximately $13 trillion in retirement assets. As the awareness of self-directed IRAs is spreading fast, more and more people are expected to join the club and according to estimates made by financial analysts, a further $2 trillion are expected to enter the self-directed IRA industry over the next two years.

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Why a Self-directed IRA is a Top Retirement Option

3 Reasons to Invest in Real Estate Using your Self-directed IRA

The recent difficult economic times have prompted people to adopt non-conventional methods of investment and saving up for retirement. The self-directed IRA option has been taken by many people for the purchasing of non-traded assets like real estate. Unlike other retirement plans, in which money is invested in return only for paper securities, the self-directed IRA, which is offered by some big-time firms like Equity Trust and The Entrust Group, allows you to invest directly in tangible assets like real estate and gold bullion or any other business of your liking.

The real estate is considered one of the safest markets to invest in because of its stability and almost guaranteed profits. Listed below are three reasons why you should invest in real estate using your self-directed IRA.

1. With a self-directed IRA, you are the custodian of your own account, you will have a free hand to make as many transactions as you want with no need to worry about losing money on transaction and custodian fees.

2. It is called a self-directed IRA for a reason. You are the director of your account and you have all the decision making power. You don’t have to take permission from any trust, financial institution or custodian every time you want to conduct a transaction.

3. The money in your self-directed IRA is well-protected from creditors and litigators because your account is set up by a limited liability company (LLC). Without the LLC tag, your retirement assets are left vulnerable to frivolous lawsuits.

With a self-directed IRA, you have a wide range of options in which you want to invest. Of course, you can always invest in the good old-fashioned stocks and mutual funds, but in addition to this, there is real estate, gold or pretty much any business that does not breach the rules laid out by the IRS (which is almost all of them).

It goes without saying that common sense should be used whenever dealing with matters involving money, especially large amounts of them. The laws regarding the self-directed IRA are complex and a little carelessness can lead the IRS to ask you some tough questions. Remember that you cannot take advantage of your self-directed IRA funds until you retire. If you are found living in a house you bought using those funds, your IRA account status could be invalidated.

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3 Reasons to Invest in Real Estate Using your Self-directed IRA

Top 5 reasons why you should start a self-directed IRA

Are you thinking about starting up a self-directed IRA account? This is not the time to think, because every second you are wasting, you are letting go of cold hard cash that would be available to you after the age of retirement. A retirement account is designed in a way that ensures the owner lives a luxurious post-retirement life without being dependent on anyone else. You probably know of most of the benefits that you stand to gain after signing up for a self-directed IRA, but here is a list of a few reasons anyway.

1. You want control of your own money

In a self-directed IRA, you can choose to take possession of the checkbook that is linked to your account. This means that you will have full control of your money and you can just sign a check and conduct the transaction the moment you see a potentially lucrative opportunity of an investment. An additional advantage of this feature is that you wouldn’t have to pay a transaction fee to your custodian every time you conduct a transfer for your brand new purchase.

2. You want to be able to borrow money from your retirement account

Contrary to popular belief, it is possible to borrow money from your self-directed IRA. You will have to pay a small penalty because the purpose of a retirement account is to save money for the age of 60. If you want to withdraw some money from it before reaching that age, it stands to reason that you would have to pay a fee for it. Besides, the many advantages that come bundled with a self-directed IRA easily outweigh the few disadvantages.

3. You want to spend your golden years in a good amount of comfort

Once again, the reason one opens a retirement account is the hope to spend the golden years of one’s life in a good amount of comfort without being dependent on anyone. With other retirement accounts, you will retire with enough money to feed yourself and maybe one other person for a couple of decades. If you go with a self-directed IRA and hit the right notes when presented with investment opportunities, you can live your remaining years quite luxuriously.

4. You want to invest in whatever you want

With the other more traditional retirement plans, you can only invest in stocks, bonds, mutual funds, treasuries. With a self-directed IRA, the sky is the limit for you to make investments. If you think you can earn money from it, you can use your self-directed IRA to buy it. Technically, you can even invest in something that wouldn’t return you any profits, but you wouldn’t want to do that, would you now? There are a few restrictions that the IRS has put in place, however, so you would want to watch out for them.

5. You want to make tax-free investments

The advantages just don’t seem to stop, do they? This can’t be said any simpler: you don’t pay a single cent in taxes when you use your self-directed IRA to make investments.

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Top 5 reasons why you should start a self-directed IRA

5 Secrets you don’t know about self-directed IRAs

Before deciding on a certain retirement plan, you should know about all the options available to you in great detail and also talk to a few people about it. You could be wasting precious time and money by opening up the wrong retirement account and by the time you realize that, it could be too late. The reason your financial adviser hasn’t talked to you about self-directed IRAs could be that they are afraid to lose your business or it could be that they simply do not know about it. Here is a list of facts about self-directed IRAs.

1. You can invest in non-traditional assets

With the more common retirement accounts including the 401k, you can only invest in stocks, bonds and mutual funds. The likes of these items are the only ones that are allowed by the Internal Revenue Service (IRS) for account-holders of the popular retirement accounts. Using a self-directed IRA, you have the option of investing anywhere that you think will fetch you a good profit.

2. You can borrow money from your self-directed IRA account

It is a common misconception that the IRS does not permit borrowing of money from an IRS account. You are allowed to borrow non-recourse loans within a self-directed IRA. All this means is that in the event of a foreclosure the person who lent the money will the right to take custody of the property by which the loan was initially secured.

3. You can invest with the help of private lenders

Most people stop investing when they run out of funds and the thought of borrowing money to keep the profits coming does not even cross their minds. You are fully permitted to borrow money from private lenders to continue buying real estate and pay part of your profit to the lender as interest. As mentioned in the previous point, even if foreclosure is filed by the lender, you are only liable to give back the property and not a cent more.

4. You can have control of your own funds

Unlike other retirement accounts, you can have control of your own money. The common term for this privilege is “checkbook control”. This means that you do not have to wait for your custodian or broker to approve of your transaction. This feature is especially helpful for time-sensitive investments where the window of opportunity is only open for a few hours. Another advantage of this is that…

5. You don’t have to pay transaction fees

Because you are making transactions yourself and are not asking anyone else to do it for you, you don’t have to pay for it either. Custodians deduct transaction fees after approving a fund transfer in retirement accounts where the account-holder is not given control of their money. The transaction fee may appear small at times but if you are an avid investor, those fees can pile up quite quickly. If, however, you do prefer your custodian to review transactions before making them, you have that option too with the self-directed IRA.

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5 Secrets you don’t know about self-directed IRAs

How To Save For Retirement by Investing in a Business

When it comes to the options available for opening a retirement account, many people find themselves clueless as to which particular one to go for. One of the lesser known but even more efficient retirement plans is the self-directed IRA. You can use this account for the securing of your post-retirement future by investing in and gaining profit from pretty much anything you want. This is not an illegal offshore scheme either; in fact it is actually encouraged by the Internal Revenue Service (IRS). According to the guidelines laid down by the government body, investors who own a self-directed IRA are entitled to invest on a tax-free basis in anything they want (barring a few collectibles and alcohol among other items).

If you think you can predict the market for a certain land area, go ahead and buy some real estate with your self-directed IRA, and enjoy with tax-free returns. If you feel more comfortable investing in small businesses, whether or not you own them, you can do that too with a self-directed IRA.

A business owner knows his own business quite well and can make accurate predictions when the profits will start flowing in. This can be a useful strategy for investing with a self-directed IRA. However, a few things have to be remembered before diving into these affairs. As mentioned above, there are a few items you cannot use your self-directed IRA account to deal in. Here is a longer list:

•    Collectibles

•    Antiques

•    Rugs

•    Art

•    Metals (except gold, silver and palladium bullion)

•    Stamps

•    Gems

•    Coins (except some US-minted ones)

•    Alcoholic drinks

Before starting a business that you want to fund using your self-directed IRA, you will want to make sure that you are not buying or selling any of the above-mentioned items. Note that you should take a look at the IRS regulations for the complete list. Regardless, it is unlikely that you would be dealing in anything prohibited other than the items mentioned here.

Another thing that you would want to watch out for while using your self-directed IRA to invest in your business is that you can’t treat that business in the same way as other entities controlled by it. For example, if you want the company under your self-directed IRA hire your company to smooth out the woodwork, even if you pay market rates, then forget about it because this is not permitted. You can’t even hire, borrow from, sell to, or lend money from anyone in your family. Exactly the same applies to your financial advisers and lawyers and their businesses.

You should know that you can contribute only up to $5,000 to a self-directed IRA within any given year. The limit is increased to $6,000 at the age of 50, but this is still considered a small window for bringing in new capital. If your business happens to need some additional capital, you will have to pay for everything using existing self-directed IRA assets.

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How To Save For Retirement by Investing in a Business

3 Incredible, yet true facts about self-directed IRAs

We are all worried about our post-retirement years. We don’t know whether we will have the money to go on that dream vacation that we plan for all our lives. We don’t know whether we will even have someone to look after us in case we start losing it. Thankfully, there are a few ways by which we can ensure that we spend our golden years in comfort. Retirement accounts are made for people who want to save up money all their working lives so that they have some serious cash by the time they retire. But there are plenty of options available and it is hard to decide which retirement account to go for. Here are three facts about self-directed IRAs and they should help you decide which account to get.

1. You can invest in real estate

Did you know that it is not only possible, but actually encouraged by the Internal Revenue Service (IRS) to invest in real estate using a retirement account? Using a self-directed IRA, you have plenty of options for investment and you can really look beyond the stocks, bonds and mutual funds that only return you a small margin of profit. There are plenty of advantages of a self-directed IRA, but it is hard to find a firm that offers a truly self-directed IRA. Many firms will just give you checkbook control and not allow you to invest in anything other than the traditional assets, so you will really have to search for the right broker for yourself to be able to invest in real estate.

2. You are allowed to use private lenders

If you have bought a lot of real estate and emptied your own self-directed IRA or have reached the upper limit, you don’t have to stop. You can continue investing and earning profits by borrowing money from private lenders and putting it into your self-directed IRA. You can pay them some interest from the profit you make and it is a win-win situation for both you and the lender. Using the money of private lenders, you can make an unlimited number of deals for an unlimited amount of money.

3. You have “checkbook control”

Even though you will not have physical custody of your money in a self-directed IRA, you will have full control with the help of a checkbook. Unlike other retirement plans, you wouldn’t have to call up your custodian or broker and ask them to approve a payment that they want to make. You can use your own decision-making skills and pay whomever you want for the purposes of investment. An added bonus of this feature is that you wouldn’t have to pay transaction fees either.

After knowing these facts about self-directed IRAs, it is important to remember that you should be careful before handing your money over to a custodian. You would want to make sure that they are qualified for the job. Don’t hesitate to contact the relevant authorities in your state for information.

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3 Incredible, yet true facts about self-directed IRAs

The Unbelievable Truth about Self-Directed IRAs

So you have finally decided to get yourself a retirement account so you can spend your golden years with a good amount of money at your disposal. But you are feeling a little bit overwhelmed by the number of choices available to you. You can’t seem to decide between a 401k that your employer has offered to set up for you and a self-directed IRA that you have just come to know about. Well, the answer depends on what type of person you are. Are you a risk-taker who likes to make adventurous decisions and enjoy the equally profitable rewards? Or are you the boring type of person who doesn’t like changes in his life and is happy spending every week exactly the same?

Assuming you are the second type, you should go for the self-directed IRA. You will have more control over your money and you will also be able to invest in non-traditional assets like real estate and gold bullion. With a 401k, you can only gain small monthly profits by investing in stocks, bonds and mutual funds.

Another thing you probably didn’t know about self-directed IRA is that it is remarkably easy to set up if you get help from a firm that specializes in the opening of these accounts. An investor new to this business will no doubt find plenty of difficulties while trying to do all the work on their own.

The self-directed IRA is not the most popular choice because most people do not like to take too many risks while making investment decisions. They like to play it safe and stick to the stocks, bonds and mutual funds through their 401ks. Another reason is that the self-directed IRA is perfectly legal and is not only permitted by the IRS, but investors are also encouraged to open by the government body to open this retirement account. There is a lot for the account-holders to gain through the self-directed IRA and not so much for brokers. This is why a large amount of advertising is not deemed a necessity.

The self-directed IRA account is opened up with an individual broker rather than with a mutual fund company. The amount of control you will have over your self-directed IRA can vary. Some brokers misuse the term “self-directed” and give their customers a traditional IRA under the guise of a self-directed IRA. This means that the account-holder will not have too much control of their money and the broker will need to be contacted every time a transaction is to be conducted.

With a true self-directed IRA, you would want be handed the checkbook for your account so that you can pay for potentially lucrative investment opportunities on the spot. Also, you will want to be able to invest in anything you want (barring collectibles, alcohol and some other stuff) and not just stocks, bonds and mutual funds.

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The Unbelievable Truth about Self-Directed IRAs

Top 5 Secrets that Can Make Your Retirement Portfolio More Effective

Saving for retirement is both scary and empowering. It can feel great to see your retirement accounts growing dramatically and thinking about how you will be covered in the years to come, but it’s important to realize that mistakes are easy to make on the road to retirement. These five secrets will help you make the most out of your IRA account so that you have plenty of money left over when it is time to settle down to a retired lifestyle.

Make a more lucrative investment decision and you will make more money for your retirement account. When put in terms as simple as that the advice doesn’t seem very helpful or difficult to follow along with. The fact of the matter is that you have a lot of freedom over what you invest in. It is up to you to make the right investment decisions so that you are maximizing your rate of return on your investments.

The fees that you pay to keep your self-directed IRA account running probably don’t seem like a big deal, but over the course of the account they can make a massive difference on the amount that you save up. While choosing a custodian to work with has him give you a list of the fees that you will be subjected to. Get clarification about any fees that you don’t understand and pay attention to the amount that each for the fees is as well as what they are for. Compare these fees with those charged by other providers and it won’t take long to weed out the poor options.

One of the best ways to make your retirement fund more effective is to get help from a professional to choose more lucrative investments. It makes sense to get information from someone more knowledgeable about investing than you are to do better with your money when your investment choice makes such a dramatic difference on how much money you make.

No matter how good your investment is initially there is always a chance that things will get worse over time. This is why you have to diversify your money between different options. The best way to diversify your money is to make investments in different industries as well as investments of different types. You can invest in real estate, precious metals, stocks, bonds, foreign currencies or just about anything else, but make sure you invest in a variety of things. The greater your variety is the more likely you will be to maintain a profitable investment portfolio within your IRA account.

The last way to get the most from your retirement account is to contribute as much as you possibly can to it. Do whatever you can to max out your annual IRA contributions and you will have more money in your account to accrue interest over time.

Use these five secrets and your retirement fund will swell in size. It’s not easy to perfect these different steps right away, but as long as you keep them in mind you should be able to improve the performance of your account as you go along.

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Top 5 Secrets that Can Make Your Retirement Portfolio More Effective