Will Baby Boomer’s Suffer from Decline in Dollar?

 

Declining Purchasing Power of US Dollar

Declining Purchasing Power of US Dollar 1970-2010

 

Many Baby Boomers are in for the financial shock of their lives, as current government spending levels are unsustainable.

Since Americans aren’t about to demand lower spending, let alone allow substantially higher taxes, this leave politicians only one out…

Inflation. Read more…

 

 

 

 

Self-Directed IRA’s – Part Two

Self-Directed IRALast week we presented Part One in our three part series on Self-Directed IRA’s which talked about prohibited transactions, what you can and cannot do with this investment tool and some of the ways you can use this tool for your real estate investment strategy.

The following Part Two of the series presents the details of what a Self-Directed IRA is and some of the advantages of converting a traditional IRA to a self-directed account in order to boost your retirement savings.

Next week’s Part Three will review some of the mistakes to avoid when purchasing real estate with a self-directed IRA.

Advantages of Converting One or More of Your Current Retirement Accounts Into a Self-Directed IRA
By Ryan Kimura

Many people are unhappy with the performance of their IRA. Limited in their investment opportunities, they often end up spending more in fees than they earn. Their savings is stagnant at best. It’s no way to save for retirement. If you’re tired of watching your retirement savings’ lackluster performance then you may be interested in transferring some of it into a self-directed IRA. A professional IRA custodian can provide you with the tools to take control of your own retirement investments and make sure your finances are performing the way they should.

What Is A Self-Directed IRA?

A self-directed IRA is an IRA account that you direct. This means you choose what you invest in. Your custodian does the legwork, you make the decisions. IRA custodians have experience providing advice for a wide range of non-traditional investments, and can provide you with top-notch administrative support and education to help you make the right decision for your finances.

These IRAs provide you with a greater number of investment opportunities. You can invest in real estate, mortgages and loans, and even private stock. There are a few limitations, of course. You can’t invest in life insurance, collectibles, or use the money to benefit a family member.

The Three Primary Advantages of Transferring One or More of Your Current Retirement Accounts

#1 The Potential To Make More Money

Why sit back and hope that your mutual funds grow enough so that you can retire comfortably? An IRA you have full control over offers you the potential to invest in potentially more lucrative markets and opportunities. For example, you can purchase an apartment complex and fund your retirement with the rental profits. You can invest in private business or offer loans or mortgages.

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#2 More Control Over Your Money

Instead of paying someone to manage your account for you, with a self-directed IRA you are in charge of your investments. In fact, many custodians are merely passive custodians. They don’t promote any investment products nor do they offer investment advice. They merely manage the necessary transactions for you.

#3 Wider Investment Opportunities and Diversification

As previously mentioned, self-directed IRAs open up a whole world of investment options. This simple fact helps you create a more diverse portfolio. Diversification reduces risk to your overall portfolio. Potential investment opportunities include but are not limited to:

  • Real estate
  • Tax liens
  • Mortgages or Loans
  • Businesses
  • Private stock
  • Precious Metals
  • Oil & Gas
  • Live Stock – Cattle & Horses
  • Finally, converting an account to a self-directed IRA is easy. In fact, your current financial institution likely offers self-directed IRA accounts.

Some Guidelines to Consider

Diversification – How much of your existing investments should you use to open a self-directed IRA? Experts suggest between 10% and 20% of your traditional IRA or 401k savings can be rolled over to open your self-directed account. The choice is up to you and you may want to talk to a financial advisor.

Make sure you’re comfortable with your investments and any potential risk – With a self-directed IRA, you’re directing the investments. You’re in the driver’s seat. We can give you the tools and knowledge to succeed, but you are ultimately calling the shots for yourself. It’s important to be comfortable investing and to know what is and isn’t allowed.

Self-directed IRAs provide you with the potential to save more for retirement. It gives you more control over your assets and investments. And finally, it’s easy to get started. Contact your financial institution or an IRA custodian who will work closely with you to put the control of your financial future squarely back in your hands.

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Self-directed IRAs are an essential tool for successful retirement planning. Quest IRA, Inc is a leader in self-directed IRAs. Visit us at http://questira.com for more information and to sign up for an account today. Article Source: http://EzineArticles.com
 
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Self-Directed IRA’s – Part One
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Self-Directed IRA’s – Part One

 

Self Directred IRA

Retirement investments are becoming more dicey, causing great concern for the future among many baby boomers. While the stock market appears to be improving, it is actually a full blown disaster when measured in inflation adjusted dollars and adjusted for real ‘after tax’ returns.

Don’t get caught up in the main stream media’s hype, as they are merely front men for a corrupt, bankrupt financial system designed to separate Boomers from their hard earned dollars.

The following article is the first in a three part series on self-directed IRA’s. Part One presents a brief history of this investment tool and discusses what can and cannot be done. It explains how you can serve as a lender and even purchase tax liens as part of your real estate strategy.

Next week’s Part Two: discusses converting a traditional IRA to a self-directed IRA, and the following week, Part Three talks about mistakes to avoid when purchasing real estate with a self-directed IRA.

As always, be sure to check with your tax advisor as the laws are constantly changing, and usually not in our favor.

An Overview of “Prohibited Transactions” in a Self Directed IRA
By Ryan Kumura

IRAs were created in 1975 as a way for citizens to take control over their retirement savings. They were established in response to ERISA, The Employee Retirement Security Act, which was passed in 1974 to put the responsibility of retirement savings into the hands of employees.

IRAs are a wonderful retirement savings tool. They provide an abundance of tax benefits and can make saving for retirement safe and relatively secure. However, they do come with a set of rules and regulations. Self Directed IRAs, which provide the most investment opportunities, also come with a list of “Prohibited Transactions.” It’s important to understand what’s prohibited to make sure you don’t incur penalties.

What is a Prohibited Transaction?

The IRS prohibits certain transactions within an IRA. Any activity that improperly uses the account’s funds is considered a prohibited transaction. These prohibited transactions center around two key terms:

Self Dealing

Self dealing is defined as “The conduct of a trustee, an attorney, or other fiduciary that consists of taking advantage of his or her position in a transaction and acting for his or her own interests rather than for the interests of the beneficiaries of the trust or the interests of his or her clients.” (Source: http://legal-dictionary.thefreedictionary.com/Self-Dealing )

It means that you cannot make a transaction that directly benefits you. For example, you can’t borrow money from your IRA. You also can’t use it as security for a loan nor can you buy personal property with it.

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Disqualified Person

A disqualified person is anyone who is directly related to you or to the account. Your spouse, dependents, and the fiduciary of your account are all disqualified people. Additionally, if someone owns more than 50% of a business or estate that is held by the fiduciary, they too are a disqualified person. This means you cannot use your IRA to their benefit.

Common Prohibited Transactions

Here’s a short list of the most common prohibited transactions. You cannot:

  • Borrow money from your Self Directed IRA
  • Sell property to it.
  • Receive compensation for managing it.
  • Use it as security for a loan.
  • Use it to purchase real estate that you use.
  • Use it to issue a mortgage on a relative’s new residence.
  • Buy stock in a closely held corporation or from a disqualified member.
  • It’s important to make sure you understand the terms disqualified person and self dealing. Make sure you don’t break the rules! If you engage in a prohibited transaction the account is treated as distributing all its assets to you at their fair market value. The distribution is then subject to taxes and penalties.

So What Can You Do With Your Self Directed IRA?

The possibilities for permitted investments are virtually endless. In addition to being able to make traditional investments like stocks and bonds you can also:

  • Invest in real estate including farm land, developments and rental properties
  • Issue a mortgage
  • Issue a loan
  • Buy a franchise
  • Invest in private equity
  • Invest in tax liens
  • Almost any investment other than life insurance or collectibles

A Self Directed IRA provides you with an abundance of investment opportunities. The good news is that if you’re concerned about prohibited transactions a good custodian can be your facilitator and educator.

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Self-directed IRAs are an essential tool for successful retirement planning. Quest IRA, Inc is a leader in self-directed IRAs. Visit us at http://questira.com for more information and to sign up for an account today. Article Source: http://EzineArticles.com
 
 
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