5 Questions to Ask Yourself in Crafting an Investing Plan

Are you new to investing and don’t know how to get started? Here are 5 questions to ask yourself to help you create a plan to fit your needs. 5 Questions to Ask Yourself in Crafting an Investing Plan   How much can you afford to invest?  First, determine how much money you can afford

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Can You Guess the Most and Least Stressful Places to Live?

So you’ve been smart and invested wisely in your self-directed IRA to build up a comfortable retirement nest egg. The last thing you want to do in your golden years is to spend your time in a stressful environment, right? Can you guess the most and least stressful places to live? Let’s take a look

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Is Your Dream Spot on One of These ‘Best Places to Retire’ Lists?

When it comes to ultimately using your retirement wealth-building program, whatever it may be – 401(k), IRA, Roth, self-directed plan – what are you dreaming of? For many people, the dream involves an idyllic place to enjoy life after retirement. The key to making that dream reality, of course, is coming up with a smart

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Stay Ahead of the Curve with a Well-Chosen IRA

As the longest economic recovery in modern history continues – we’re now into Year 10 – I am encountering more and more clients and potential clients worrying that a big market correction, if not an outright recession, is just around the corner. While I don’t have a crystal ball and can’t predict what is on

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What’s the Difference Between a Roth IRA and Traditional IRA?

We hear a lot of potential clients ask, “Which is better: a Roth IRA or traditional IRA? And what’s the difference, anyway?” There are distinct differences between them, not the least of which is the tax advantage that each one affords. And that can translate into hundreds, even hundreds of thousands, of dollars that could

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How to Choose Between a Custodial or Checkbook Self-Directed IRA

Since most banks don’t allow their IRA clients to purchase real estate through those accounts (because it doesn’t create any profits for the bank), those investors may opt for a self-directed IRA. Next, the investor must decide how to choose between a custodial or checkbook self-directed IRA.

Whichever type you choose, you’ll be able to invest in an asset you actually understand — not only in real estate but also just about anything else other than collectibles or life insurance.

Here are just some of the assets in which you can invest with your self-directed IRA:

  • Real Estate
  • Tax Liens
  • Trust Deeds
  • Mortgage Notes
  • Stocks & Bonds
  • Real Estate Investment Trusts (REITs)
  • Precious Metals
  • Foreign Currency
  • Other Alternative Assets

How to Choose Between a Custodial or Checkbook Self-Directed IRA

With a custodian-controlled self-directed IRA, you are in charge only up to a point. Under this structure, only the IRA Custodian can write checks and pay bills from that account.

With this type account, you direct the Custodian as to what type assets to invest in. But choose carefully, as not every institution may include your chosen asset in its offerings. Many banks and other institutions don’t offer investing in real estate, for example. They may choose to specialize in a specific type of asset instead. It also can be a lengthy process to make your investment when you have a third party involved in the process.

Things move much faster with a checkbook-controlled self-directed IRA. And that is vital for a real estate investor who needs access to funds quickly when coming upon a great deal.

With a checkbook-controlled self-directed IRA, first you set up a limited liability company that is the owner of your self-directed IRA. Next you open a business account in the name of your LLC and the Custodian transfers your assets to that account. Now youare in control, and you can choose what to invest in – within the limits of the law, of course.

With a checkbook-controlled account, you decide what to invest in – and when. Simply write a check. There are no forms, fees or other frustration as with some other types of IRA.

For more information about how self-direction works, see our blog entitled “How Does a Self-Directed IRA Work?”

Self-Directed IRA Investment Can Be Safe, But Beware of Fraud Schemes

Even though self-directed IRA investments represent just a slice of the trillions of dollars invested by Americans in Individual Retirement Accounts, that still adds up to billions. And so it’s vital to stay vigilant and beware of investing fraud schemes. A 2011 report by the Investment Company Institute found that U.S. investors held about $4.7

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Contributions to IRA by April 17, 2018, can be Applied to 2017 Taxes

As part of looking out for our clients, we actively monitor numerous resources, including the IRS, through its regular tax tips and newsletters. With this year’s tax filing deadline looming, here’s a recent reminder that’s especially relevant: You still have time to contribute to an IRA and apply that activity to your 2017 return. Anyone

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Study Shows Half of U.S. Households Not Prepared for Retirement

Are you prepared for retirement? The latest measurement of the National Retirement Risk Index (NRRI) shows that “half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living, even if they work to age 65 and annuitize all their financial assets, including the receipts from a reverse mortgage on

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For Those Who Revel in the Details of Tax Reform…

With both federal and state tax laws as complicated as they are, many people prefer to leave the details to their own advisers and tax preparers. Others prefer a much more hands-on approach so they know exactly what’s happening to their hard-earned money. To help, we’ll pass along links to sources of tax information we

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Yes, You Can Use Your IRA to Invest in Bitcoin — But Should You?

Should You Use Your IRA to Invest in Bitcoin? You may have noticed the plethora of companies promoting the use of IRAs to invest in bitcoins. Whether that’s a good idea or not continues to be a matter of debate. Much of the conversation centers around whether cryptocurrencies are heading for a dot-com-like bust. Right

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Is Your Digital Security at Risk? Probably…

Is Your Digital Security at Risk? Probably… Like anyone who hasn’t been in a Rip Van Winkle-like haze for the last decade (at least), I’m concerned about data security in the digital age, both for myself and my clients. So, this news item caught my eye and I wanted to share it. According to a

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Tax Reform Could Spell End of Coverdell Contributions

Update: House and Senate GOP lawmakers announced around midday Wednesday, Dec. 13,2017, that they have agreed on a final tax package. Senate Finance Committee Chairman Orrin Hatch, R-Utah, did not provide any details of what would be included in the deal, deferring to President Trump to decide when the information will be released. So at this

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What Are the Rules on Taxes and Vacation Homes?

Many of our rollover clients have used their self-directed IRAs to invest in so-called “vacation properties,” renting out scenic beach-front or mountaintop homes for short or extended periods as a way to generate income. The law is very clear that you can NOT use these properties for your own enjoyment if they have been bought

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IRS Advises Identity Theft Victims on What to do Next

Data breaches and keeping your sensitive personal and financial information secure seems to be in the news a lot. But the topic is especially top-of-mind at this time of year, as businesses prepare for the end of the year and tax season and as holiday shoppers flood the local malls or their favorite internet sellers.

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5 Things to Know about Required Minimum Distributions

Does your retirement plan call for a Required Minimum Distribution? If it does but you haven’t yet taken the RMD, the clock is rapidly ticking. You’ll need to calculate and schedule your RMD in plenty of time so you don’t miss the Dec. 31 deadline and face costly penalties. All employer-sponsored retirement plans – including

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And the Survey Says: Emotions Affect Retirement Goals and Planning

Do you want to live comfortably in retirement? Of course, we all do – or should! – and that’s why it’s so important to take charge of your investment dollars and make sure they are producing the best return for you. And the Survey Says: Emotions Affect Retirement Goals and Planning Results from a new

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IRS Announces Cost-of-Living Adjustments for 401(k) and Other Retirement Plans

Cost-of-Living Adjustments for 401(k) and Other Retirement Plans The Internal Revenue Service recently announced cost-of-living adjustments for certain retirement-related plans applicable for the tax year 2018. The Secretary of the Treasury is required by law — Section 415(d) of the Internal Revenue Code — to adjust the dollar limitations for cost-of-living increases on benefits and contributions

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Can You Roll Over an Inherited IRA?

Can You Roll Over an Inherited IRA? So you’ve inherited an IRA … what now? First, do not do anything rash, such as rushing to cash out this financial “windfall.” That will most certainly result in huge tax consequences, no matter what your status as the beneficiary. The smart thing to do is consult a

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Investment in Student Housing Makes the Grade

Once you have established your self-directed IRA, you may be amazed at the multitude of possibilities for assets in which you can invest. By far, real estate leads the pack. But even that is a broad category. Within real estate, you could invest in single-family rentals, multifamily, vacation homes, larger apartment buildings, self-storage facilities, and

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How Does A Self-Directed IRA Work?

How Does A Self-Directed IRA Work? Let’s discuss how a self-directed IRA can work, and especially one for real estate The first step in investing with a self-directed IRA for real estate is choosing a provider. For the purposes of this discussion, a provider is an entity or group of entities that includes custodial and

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Be Wise in Your Retirement Planning Based on Home Values

Are Canadians that different than those of us in the U.S. when it comes to thoughts — and plans — about retirement? Just-released research from the Ontario Securities Commission (OSC) suggests that many Ontarians are basing their retirement nest-egg growth hopes on speculation that their homes are going to continue to appreciate. While looking at

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IRS OKs Hardship Distributions for Hurricane Harvey Victims

Clients and friends: We are happy to share the following news release from the IRS regarding hardship distributions to victims of Hurricane Harvey: Retirement Plans Can Make Loans, Hardship Distributions to Victims of Hurricane Harvey WASHINGTON — The Internal Revenue Service today (Aug. 30, 2017) announced that 401(k)s and similar employer-sponsored retirement plans can make

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Percentage of Working Americans Saving More for Retirement Highest in Six Years

A new report from Bankrate.com (cited below) provides a look at the retirement-savings trends over the last year. How does this compare to your habits? And if you are among those who have cut back on their savings, we invite you to explore the other information on our website that may help you find a

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Study Reveals Retirement Hopes and Dreams of Investors Under 30

Despite rent, student loans and early withdrawals from their retirement accounts, investors under 30 feel confident they will enjoy the retirement they want, according to a recent study by E*TRADE. E*TRADE’s quarterly tracking study of experienced investors showed how investors under 30 feel about — and plan for — retirement. What are the hopes and

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IRA Account Balances Reach All-Time Highs As Average IRA Climbs Over $100,000

Retirement account balances in Q2 2017 reached all-time highs for the third consecutive quarter, according to an Aug. 3, 2017, release from Fidelity Investments. IRA account balances hit all-time high Positive stock market performance and increasing contributions drove the average 401(k) and IRA balances to record levels. The average 401(k) balance hit $97,700, while the

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Understanding ‘hardship distributions’ from a retirement account

One of the areas of concern expressed by many of our clients is access to retirement account funds if you need them before reaching the normal age of withdrawal. Specifically, they wonder about “hardship distributions” and the regulations surrounding them. And who can blame them for asking, considering the volatility of the U.S. economy over

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How to fight the growing ransomware threat

The IRS is in the midst of a 10-week security awareness campaign aimed at tax professionals, but the messages are applicable to us all. The campaign, “Don’t Take the Bait,” puts the spotlight on various attempts to compromise personal data through cyber attacks. In the latest news release publicizing the campaign, the IRS warns tax

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Are You Looking Out for Your Own Financial Future?

The times, they are a-changing. And if you’re still investing in certificates of deposit or some other strategy offering measly returns, it’s high time you changed, too. It’s time for you to look out for your own financial future instead of relying on an outdated retirement plan. Fading fast are the days when you could be confident

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How Does a ‘Spousal IRA’ Work?

“Spousal IRAs” can be confusing to some people. But the idea is simple: to enable the non-working spouse in a household to also build an individual retirement account with tax benefits. How a spousal IRA works The idea behind an IRA is that some of the employed person’s earned income can be contributed to a

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