Plan Types and Information

  • How to Submit a Real Estate Investment with the QTC Investment Hub

    Change the way you submit an investment with the new, online QTC Investment Hub in the Client Portal! You now have the ability to submit new real estate investments and much more in the portal – and you can talk to a live representative at the same time. This means your investments are taken care of faster than ever before, because in just a few easy steps, you can have your new investments uploaded in a matter of minutes.  How to Submit a New Investment  The days of emailing back and forth or picking up the phone are over! When you’re ready to submit a new real estate, simply log in to your Client Portal.  With the QTC Investment Hub, all you need to do is fill in the step-by-step investment information and funding details, then your investment is ready to be reviewed for funding.  5 simple steps!  Log in to your client portal and under the “Investment” tab, click the green button that says “Submit New Investment”  Select the type of asset you want to purchase and what account you’d like to use  Share the investment details with us and how you’d like us to send the funds  Confirm the information and special instructions, then upload your supporting documents  Final review and ...

  • 3 Reasons Why Self-Directed IRAs are Worth the Time and Energy

    You’ve likely found that setting up a new IRA is usually a quick and easy process. After all, many traditional IRA custodians use online forms and (in the case of a bank or brokerage that’s acting as custodian) these custodians generally allow you to instantly transfer money to fund your new IRA from other accounts you may have at the same institution. But setting up a self-directed IRA isn’t that much more time consuming than an IRA with a more traditional custodian. It’s true that it might take a little extra time to fill out an extra form or two, or to fund your account. But what’s more important is that the benefits of having a self-directed IRA instead of a traditional account far outweigh the small amount of extra time and energy you’ll have to expend. 1.         The Opportunity for Greater Gains. If you have an IRA with a bank or brokerage as the custodian, then you’re going to be significantly limited in the types of investments you can choose for your account. Traditional IRA custodians generally limit investments to stocks, bonds, mutual funds and bank CDs. While there’s nothing inherently wrong with this selection of investments, many individuals would like ...

  • The Downsides of Making an Early Withdrawal From Your Self-Directed IRA to Pay Your Child’s College Expenses

    With the cost of a college education rising faster than inflation, and at a higher rate than most are earning with their investments, many families are considering different options for trying to pay for tuition, room and board, and other higher education expenses for their children. Loans are an option, of course, but we’re seeing that many recent college graduates are having trouble handing tens (or even hundreds) of thousands of dollars of debt. Some individuals are familiar with the various exceptions to the rules that prohibit early withdrawals from their IRAs. In particular, there is an exception that allows an IRA account holder to make withdrawals from their IRA without having to pay that 10% penalty in order to pay for certain qualified higher education expenses. While this might sound like a good solution to the problem, it’s important to understand that there are some significant downsides to making an early withdrawal from your self-directed IRA to pay for your child’s college expenses. You Lose Time Value Compounding. You probably know that the longer you have funds actively invested in your account, the greater chance you’re giving your account to grow. But when you take money out of your account when you’re ...

  • When to Invest in Real Estate Short Sales With Your Self-Directed IRA

    There are lots of different ways to use a self-directed IRA to invest in real estate. You can purchase properties outright, of course, and your investments can run the gamut from single-family residential real estate, multi-family units such as apartment buildings, commercial properties, industrial properties, undeveloped land, and even farmland. Due to its very nature, the market for virtually every type of real estate investment is going to be different then the trading markets for stocks and mutual funds. Real estate is an illiquid asset class, and it’s not uncommon for buyers to borrow a significant portion of both the funds required for purchasing properties, using the property itself as security for that borrowing. Sometimes these buyers won’t be able to satisfy their repayment obligations, and the entities that provided that financing will want to use the property as a means to satisfy the debt. The well-known foreclosure process is often used in the context of residential borrowers failing to repay their mortgages. The “short sale” is a similar process. A short sale is a negotiation involving the sale of property where the proceeds of the sale will be less than the outstanding debts and liens on that property, but which releases the ...

  • Have You Integrated Your Estate Planning Goals into Your Retirement Planning?

    There are two important types of long-range financial planning that most of us have to go through as we mature. The first, of course, is retirement planning. We know that at some point we’re going to want or need to stop working, and we realize that whatever Social Security income we receive is likely to be inadequate. So we save. The second type of planning is estate planning. We know that at some point we’re going to pass away, and we would like to make sure that whatever wealth we’ve accumulated up to that point is distributed in accordance with our wishes. The challenge sometimes lies in the fact that our retirement accounts have beneficiary designations that can supercede the terms of a last will and testament. Here are some tips for integrating your estate planning goals into your retirement planning: Review Your Beneficiary Designations. The first step should be to evaluate your current position. Begin by reviewing the beneficiary designations in your self-directed IRAs, your other retirement accounts such as 401(k) accounts at work, your taxable investment accounts, and even your bank and checking accounts. Write all of these beneficiaries down on a single piece of paper. Aggregate the amounts to each ...

  • Understanding Self-Directed Employer Plans and Which One Is Right For MY Business

    Self-employment can be a blessing and a curse! On one hand, you control your own hours and you can proudly say that you are your own boss, but the privilege of being in charge also comes with responsibilities and the important matters always fall on your shoulders. The good news is that being self-employed in the world of IRAs is great! As a small business owner, you have plenty of employer plan options! From the common plans like the SEP IRA and the Simple IRA to the powerful Solo 401(k), there are plenty of options to save for retirement that fit each accountholder’s needs. But how do you know which one is best for you? As you begin researching all the accounts and their difference and similarities, you’ll want to examine exactly where you stand and what you’re aiming to accomplish. Take a moment and ask yourself…”How many people do I employ?”, “How much am I looking to contribute?”, and “How much management am I willing to put in?” There are no wrong answers, but they are all important factors to take into consideration when reviewing your options. There are three main self-employed plans: The SEP IRA, the Simple IRA, and the Solo ...

  • Steps for setting up a self-directed IRA

    The Internal Revenue Service is restrictive on the type of assets that you can own through the IRA. For instance, it prohibits ownership of alcoholic beverages, some precious metals, jewelry, collectibles, and life insurance. It does, however, allow investment in private stocks held in corporations or limited liability companies. The steps for setting up a self-directed IRA are as outlined below: Identify a custodian It’s important that you identify a third party administrator or a trustee who is willing to hold your assets under your self-directed IRA. The trustee(s) must have the authorization from the IRS to act in this capacity. The trustee must also be specialized in financial planning and be experienced in handling the Retirement Investment Fund. Open an account with the trustee Open an account with the chosen custodian and fund it with up to $6,000 ($7,000 if 50 or older). Alternatively, you can execute a trustee-to-trustee rollover transfer. It’s a directive to your old IRA to move your assets to the new IRA under the new trustee. Your new custodian will give you the forms required to finalize this paperwork. Identify the desired area of investment With an account ready, you can now choose the type of business that you want to ...

  • How a Self-Directed IRA Can Help You Make it Through Difficult Family Adjustments

    It’s important to have a personal budget and a long term financial plan because they help ensure the safety and comfort of ourselves and our families. But even the most well considered and reasonable plans can run into roadblocks. In these cases, proper use of your self-directed IRA can help you make it through difficult family adjustments. Helping Your Child Pay for College Having your kids go off to college can be an exciting time, but it can also cause some serious difficulties for your family budget. Even if you have been diligent in planning for your child’s education, what if they’re accepted into a more prestigious school that costs more than you budgeted for? What if they did not receive the scholarships or financial aid you anticipated? Or what if tuition has increased more over the years than you planned for? You can take penalty-free withdrawals from your self-directed IRA in order to pay for various types of educational expenses for any member of your immediate family. This means that you can use funds from your self-directed IRA to pay for your child’s tuition, room and board, books and other fees if you find that your other financial resources are not adequate. Unexpected ...

  • Do You Have an IRA Exit Strategy?

    You may be familiar with the term “exit strategy,” but perhaps only with respect to the investment world. In fact, it’s also important that you have an exit strategy when it comes to your IRAs. So what exactly does “exit strategy” mean in the context of your IRA? Traditional IRAs require that once you reach age 72, you must begin taking distributions from your account each year. The minimum withdrawal amount is calculated each year based on your account balance and your age. (These are known as the “Required Minimum Distribution” or “RMD” rules.) The penalties for not following the RMD rules can be severe, and can effectively undo much of the tax advantage you may have gained by setting up the IRA in the first place. But remember that for traditional IRAs, withdrawals will add to your taxable income. And if you’re subject to the Required Minimum Distribution rules, you’ll be forced to take those withdrawals (and pay the taxes that are due), regardless of whether or not you actually need that money to fund your retirement expenses. On common technique for avoiding the RMD rules is to convert a Traditional IRA to a Roth account. Roth IRAs are not subject to ...

  • Three Common IRA Myths to Guard Against

    There is a lot of good information out there about individual retirement accounts. Quest Trust Company, for example, has published a great deal of valuable information and guidance about the pros and cons of the various account types, including the self-directed IRA, how to get started, and pitfalls to avoid. But there’s also no shortage of misunderstandings that people have, as well some common IRA myths have been around for decades, it seems. The biggest problem with this misinformation is that it can lead people to make sub-optimal decisions regarding their accounts, or perhaps even to not open an account in the first place. Here are three of the most common myths that you need to guard against. It’s Not Worth Making Non-Deductible Contributions to an IRA. Many retirement savers are initially drawn to IRAs because their contributions may be tax-deductible in the year they are made. This can be an extremely strong incentive to contribute, as it effectively gives the account holder and immediate “rebate” or return on their investment equal to the amount of their deduction. The downside of this valuable benefit is that it can sometimes lead people to focus too much on the possibility of a deduction and not enough on ...

  • Increase Your Private Investment Allocation With Your Self-Directed IRA

    Individual retirement accounts are perhaps the single most powerful tool you have in your retirement planning arsenal. You have greater control and flexibility over your retirement funds as compared to an employer-sponsored 401(k), and a Roth IRA can provide significant benefits for tax savings and estate planning purposes. Self-directed IRAs take things a step further. Having an account with a custodian such as Quest Trust Company will allow you to invest in an even wider range of asset types, including a variety of private investments. Here are some ways to increase your portfolio allocation into these investment types by using a self-directed IRA. Private Mortgages. Regardless of the state of the economy, people are always going to want (or need) to buy and sell homes. The IRS regulations permit you to use a self-directed IRA in order to issue private mortgages. Provided you understand the process fully, follow all legal requirements and evaluate your risks accordingly, you may find this to be a significant boost to your portfolio. In fact, when prevailing interest rates increase and it becomes more difficult for the average home buyer to get a loan from a bank, you may have even more opportunities for making private mortgages. Private Equity. ...

  • Need to Undo a Self-Directed Roth IRA Conversion? Consider These Factors First.

    Let’s first be clear on what we’re talking about here. In 2010, the IRS rules were amended to allow anyone, regardless of their level of income, to convert their traditional accounts to Roth accounts. This lets the account holder leverage all of the advantages that a Roth self-directed IRA has over a traditional account, even if they aren’t eligible to contribute to a Roth IRA directly. But even though converting from a Roth IRA to a Traditional IRA is often a good financial decision, the timing of that conversion can sometimes mean that the taxes you pay upon conversion could be more than you would have paid if you had done the conversion at a different time. If you find that you’ve done a conversion that could have been done for a lower tax hit if you had converted later, then you can undo or “recharacterize” that conversion, subject to a few requirements and considerations. What is a Recharacterization? A “recharacterization” is the process of undoing a traditional to Roth self-directed IRA conversion that we just discussed. Why might a person want to undo the conversion? The most likely reason is that the value of the assets that were converted to their Roth ...

  • In Kind Transfers: How They Work and When to Use Them

    Opening a brokerage account and beginning to invest in assets can help individuals grow their wealth and save for retirement. According to information from the PEW Research Center, over 50 percent of U.S households are currently invested in the stock market.  Brokerage accounts give individuals the ability to buy and sell securities on the financial markets. Investors will deposit money and instruct the broker on what assets to buy or sell. But, what happens when you want to transfer to a different brokerage?  Selling your equity can get expensive with all the taxes and fees, luckily there’s another option – in kind transfers. Keep reading this guide to learn more about in kind transfers and when you should use one. What Are In Kind Transfers? When it comes to transferring assets, you have a few options, either you can sell your investments and transfer the remaining cash balance to a new brokerage, or you can use what is called an in kind transfer.  Individuals will transfer to another brokerage for a number of reasons, including: Lower fees More variety Minimum requirements Better service  Promotions An in kind transfer doesn’t involve any selling – it’s simply just moving your investments from one brokerage to another. This is as opposed to doing a ...

  • The Pros and Cons of Opening Multiple IRAs

    IRAs incentivize retirement preparations with tax advantages for investors. Most people are at least passingly familiar with some of the major IRA options, like Roth and Traditional IRAs or Individual 401ks, and each type offers different flexibilities and advantages. And while the average portfolio may only be stocked with an IRA provided by an employer, many smart investors have more than one IRA.  The usual sweet spot is one IRA from an employer, and one additional Roth or Traditional IRA. But is this the right choice for everyone? Let’s explore some of the advantages and disadvantages of opening multiple IRAs.  PROS  Tax Diversification  Different types of IRAs are taxed differently. By diversifying your portfolio with different types of IRAs, you can strategically increase your control over your finances.  For example, Traditional IRAs can provide immediate tax deductions.  This immediate deduction is often a great incentive for increased contribution to your IRA, which in turn can increase your earnings.  Traditional IRAs also taxes investors on income used to fund the IRA only when they start withdrawing in retirement; this means that overall Traditional IRAs delay taxation on the investor.  In contrast, Roth IRAs do not provide immediate tax deductions on income funding the IRA, but investors pay no taxes ...

  • 5 Reasons Why It’s Important to Start an IRA Early in Life

    It’s likely that last thing a new college grad is going to want to do with their paycheck: use part of it to start a retirement account. After all, the concept of retirement may seem quite difficult (if not impossible) for an individual in their early to mid 20’s to fully grasp. But the most reliable way to ensure a financially secure retirement is to begin retirement savings early. In fact, here are five reasons why it’s important to start an IRA early in life. To Get Into The Habit of Saving. One of the most important reasons to start an IRA early in life is to get in the habit of saving. While this might sound like something that’s simple to achieve, there are many individuals and families that haven’t developed a strong savings habit. By beginning your IRA early, and making regular contributions to it, the process of saving becomes well ingrained in your lifestyle. To Take Advantage of Time. The most reliable way to grow a savings or investment portfolio is to give it time. Even investments that only provide a relatively small rate of return can ultimately yield significant amounts when they are given decades to compound. For example, ...

  • Consider These Top Income Streams For Your Self-Directed IRA

    It’s certainly natural to think of investing your self-directed IRA in long-term growth investments. After all, most retirement savers have medium to long term investment horizons, and knowing that these investments have decades to grow certainly makes that type of focus very attractive. But income generating investments also have a place in your self-directed IRA. For example, when you move from the workplace to retirement, you may need to be able to live off the income that’s generated by your self-directed IRA. You may also want to include income generating investments in your self-directed IRA simply as a matter of diversification. And remember that income or dividends that are generated inside the account don’t incur any tax liability when they hit your account. Here are some of the top income streams for you to consider within your self-directed IRA. Real Estate. This is the classic income generating investment, and the ways to invest are varied. You can purchase real estate directly with your self-directed IRA, and this is one of the big advantages of a self-directed IRA over a retirement account with a traditional custodian. Your investment can be in a single family unit, a multi-family dwelling, commercial real estate, farmland, as all ...

  • How to Value Illiquid Investments Within Your Self-Directed IRA

    Because self-directed IRAs allow you to invest in a broad variety of asset classes – including many asset types that traditional IRA custodians choose not to permit – you may elect to use some of the funds in your account to buy assets that are relatively illiquid. These might include real estate, private equity investments, as well private mortgages and other types of debt. Even for good investments, a lack of liquidity provides some challenges; not the least of which is knowing the current value of those investments in your account. Here are some tips for valuing illiquid investments within your self-directed IRA. Understand the Reasons for Your Valuation The methods you use for valuing any illiquid investments you hold within your self-directed IRA depend in large part on why you’re doing the valuation. Are you getting ready to reduce or sell your investment holding? If so, then having an accurate measure of value will be extremely important. After all, you don’t want to leave some of your investment gains on the table by accepting a price that’s too low. On the other hand, if you’re simply looking to come up with an estimated value for your overall portfolio, then getting a precise valuation ...

  • Circumstances Under Which You Might Consider Taking

    Early Withdrawals from Your Self-Directed IRA The IRA was created to give individuals a tax-advantaged option to save for their retirements, and exercise more control over such accounts than workers traditionally had with employer-sponsored pensions. In exchange for such benefits, however, the IRS requires that the accounts truly be for retirement purposes, so an individual who takes funds out of their account will be faced with a 10% penalty on the amount of the withdrawal, on top of whatever taxes might otherwise be due. But there are a few situation in which the IRS will waive that 10% penalty, and these can potentially provide you with the opportunity to make financially sound early withdrawals from your self-directed IRA. To Pay Down High-Interest Debt. This isn’t necessarily a good idea for everyone. But if having too much high interest debt is impacting other areas of your personal finances, then it could potentially be worth taking an early withdrawal from your self-directed IRA — although the amount of that withdrawal should be as small as is necessary to accomplish your goals. For example, if you find that servicing your credit card debt is preventing you from being able to afford adequate health insurance, or that your ...

  • How to Navigate the New Client Portal

    It’s always been part of our human nature to push boundaries in order to achieve the next, great accomplishment. First, it was successfully getting an airplane off the ground. Then, we sent a man to the moon! Now it’s our turn for advancement. For Quest, our way of taking things to the next level is the Client Portal.  If you haven’t logged in to your Client Portal recently, you might be surprised to see that we have done many updates and have added new features all across the platform, as well. All these changes and new creations were designed to make self-directing your IRA a quick and simple task. And although change might sounds a bit scary, this article is here to help you navigate your Client Portal and all the new features it has to offer! Navigating the Client Portal First and foremost, you’ll need to know how to log in to the portal. You can start by going to the Login page on our website by visiting questtrustcompany.com. In the upper right hand corner, you will find an orange button that says “Client Portal”. This will take you to the portal, and here, you can log in as a first-time user. ...

  • Paying for Educational Expenses TAX FREE – Comparison of the Coverdell and 529 Plans

    With the new school season just around the corner, you have probably already started working on your schools supplies lists. However, the beginning of the year isn’t just the only time you spend money for school.  Materials for projects, electronics for homework, maybe even school uniforms and tuition are things that come at all times during the school season. Wouldn’t it be nice if the money used for purchases were exempt from federal income taxes? They can be, and there are investment plans that allow you to do this!  The Coverdell Education Savings Account and 529 are similar education plans that allow you to save for college and other education, but their differences can determine which one is best for you. Some plans, like the Coverdell ESA, allow you to diversify your investment portfolio by doing alternative investments like self-directed real estate or notes, for example.  In this article, we’ll cover the main differences and similarities so that you can get a feel for which account may best fit your needs. The Coverdell and the 529 are both used for education, and this is the most common similarity. What does education cover? The good news is… that answer is very broad. Educational expenses can ...

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