Most Americans invest their retirement money in traditional assets- mainly stocks, bonds, mutual funds and CD’s. Unfortunately, these types of assets often don’t keep pace with inflation and are not designed to provide stable monthly income.
The majority of Americans 65 or older are working well into their retirement years, often at low paying jobs, due to the need to cover monthly expenses and the fear of outliving their inadequate retirement savings.
The main source of income for more than 60% of retirees is their monthly social security benefit and in 2013, the average monthly check paid to a social security beneficiary was a mere $1,246 per month. Even with the meager monthly checks retirees receive, the social security trust fund cannot sustain itself long term and is running in the negative.
With an IRA you can have a lifetime of tax advantaged income. This means that you are getting the very most from your money, which would otherwise be going to the government.
A Self-Directed IRA may sound complex on the surface but in reality, it is quite easy. Simply put, “self-directed” means that you get to invest in your account, at your own discretion, into any investment allowed by the government. Even more simply, “self-directed” means that you have control of when and where you invest your money.
If you’re interested in converting your IRA over to a Self-Directed IRA, we recommend several trusted companies to help you do this. Converting will require you to hire someone to act as the trustee or custodian of the account, while you act as the director, deciding what to invest the account funds in. Here is list of companies we recommend:
· Advanta IRA
· Specialized Trust Company
· Midland IRA
Advantages of Investing in Real Estate with a Self-Directed IRA
Diversifying your retirement portfolio and tax benefits are just two advantages that come from investing in real estate through a self-directed IRA. Can you imagine not paying taxes on the profits of your next investment? It’s possible with the combination of tax advantages available in an IRA and real estate investments. After your next real estate transaction, you could defer paying taxes on the profits for years, or never pay taxes on the account if you use a Self-Directed IRA.
· Investment control: the account owner is the person making investment decisions and ultimately determines how, when and where to invest the funds.
· Diversity: you can diversify beyond the market into real property. You aren’t limited to stocks or mutual funds that hold real estate investments. You can own the actual property!
· Tax advantages: lasting wealth means investing in a tax-advantage account over time where you can make tax-deferred/tax-free profits and see large tax deductions.
· Security: you’ll have secure hard-earned assets because Self-Directed IRAs are protected under federal bankruptcy laws.
· Ongoing wealth for future generations: some Self-Directed IRAs allow you to pass assets on to beneficiaries after death with little or no taxes.
Schedule a call for us to talk through options and help get your retirement account a 6-12% return.