Plan Types and Information

  • A Checklist of Possible Year-End Deductible Contributions

    As tax time rolls around, most of us will be looking to reduce our annual tax bill as much as possible. Since no one is going to want to lower their income, the best way to pay less in taxes is to make sure you’re not missing out on any big deductions. Below is a checklist of possible year-end deductions to consider. Deductions for Contributions to a Traditional IRA. Depending on your income and whether you’re covered by a retirement plan at work, you may be able to contribute to a traditional IRA for tax year 2013 and deduct the full amount. Alternatively, you may decide that the value of a tax deduction this year is outweighed by the aggregate tax savings you’d realize by contributing to a Roth IRA instead. Your Home Mortgage Interest Deduction. For years. one of the most valuable deductions for U.S. taxpayers has been the home mortgage interest deduction. While there are some limitations on the availability of this deduction (most notably, that it relate to the taxpayer’s primary residence or second home, and that only the first $1,000,000 of debt is covered), most homeowners can save significantly on their taxes if they have a mortgage on ...

  • Smart Ways to Give to Charity

    For many individuals, the end of the year personal-finance routine includes not only beginning to collect receipts and financial statements to prepare their tax returns, it also means that it’s time to write checks and make donations to their preferred charities. These charities might be ones that the individual has had a relationship with for years, or an organization they’ve only recently become interested in, or perhaps even one that helps assist in recovery from a recent natural disaster. But there are smart ways to donate, and not so smart ways to donate. Here are some pointers to make sure that you’re getting the most from whatever charitable donations you choose to make. Donate Directly. It’s important to make sure that whenever you choose to make a charitable donation you make sure to do so directly to the charity itself, and not to any type of middleman or intermediary. Unfortunately, there are scam artists who use natural disasters and other tragedies as an opportunity to use telephone and online solicitations to target generous individuals. Instead of taking a chance that the person who’s asking you for money doesn’t actually represent the charity they claim to, send your checks directly to the charity ...

  • Tips for Using Your Self-Directed IRA to Invest Internationally

    Seasoned investors often look to make investments wherever they feel gives them the best opportunity for the highest return. In some cases this may lead them to invest outside of the U.S. And individuals who have a self-directed IRA may also be interested in using that account to make international investments. Identifying International Investments. Your first line of research should be to investigate relatively straightforward investments such as stocks, mutual funds and exchange-traded funds to see if you can find investments that have appropriate international exposure. Keep in mind that not everyone who is interested in international exposure will want to embrace that exposure to the exclusion of other markets. For example, did you know that a significant portion of the revenues from one of the most iconic American brands – McDonald’s – comes from their international territories? You may be able to find a number of different options with your research that can provide you with the level international exposure you are looking for. Have a Trusted Advisor. If you are interested in other types of international investments, including those that are “on the ground” outside of the U.S., then make sure that you always have expert assistance and advice to help you understand ...

  • Kick Off Your 2015 Retirement Investment Planning With A Bang

    Retirement planning never really stops. From the moment you first begin to understand the importance of taking charge of your own financial future, you’re likely to be engaged in retirement planning to some extent. Retirement planning continues even once you reach traditional retirement age and stop working full time. You need to continue investing to make sure you have enough in your account to last throughout your retirement years, and by the same token, you need to calculate how much to withdraw each year. You’ll certainly employ a long-term strategy, but you’ll also make important retirement decisions on a year-to-year basis as well. Successful retirement investing, for example, is a mix of long-term focus and adjusting your holdings to reflect changing market conditions and your changing financial scenario. Here are some tips for considering how you can start your 2015 retirement investment planning off with a bang. Make Your Investment Contributions Immediately. This may not be an option for everyone, but you can start your year off right by making your annual self-directed IRA contributions immediately. For whatever reason, far too many individuals wait until the end of the calendar year (or even into the next year, prior to when they file their ...

  • Investment Ideas for a $10,000 Self-Directed IRA

    For most individuals who are saving for retirement, the process of building a large nest egg is one that happens over many decades. It can sometimes be difficult to fully appreciate how smaller contributions can ever grow into a large retirement fund. In large measure, the key to growth is consistent saving and investing. For example, let’s say this you’ve rolled over a small 401(k) balance from a prior employer, or that it’s January or February and you’ve just made your annual contributions for the prior and current tax year, and you now have an additional $10,000 in your self-directed IRA to work with. What are some investment ideas for that $10,000?   Private Debt. Private debt instruments are another investment type that can be a great way to put $10,000 to work within your self-directed IRA. You might choose to originate a loan to a homeowner for a second mortgage, or to a small business owner looking to expand. Again, among all the various retirement savings options you have, you’ll only be able to make these types of investments with a self-directed IRA. As with all investments, be sure to document any private loan deals properly, in order to protect your interests. Dividend-Paying ...

  • The Little IRA That Could

    A Self-Directed IRA (SDIRA) differs from a standard IRA due to the unique investments it can hold. Unlike standard IRAs which hold publicly traded assets, such as stocks and bonds, a SDIRA can hold a wider scope of investments – such as real estate and private notes. While the freedom and versatility that come with an SDIRA sound appealing for many individuals looking to invest, some worry they do not have enough capital to get started with an SDIRA account. Below we explore real-life examples that prove that as long as you have the relevant knowledge, you have enough capital to begin investing in an SDIRA. The power of a little IRA If you are interested in investing in real estate, you may be wondering how a little IRA can help you secure a property. Smaller IRAs, such as a health savings or children’s Coverdell account, can be partnered with larger accounts to create a greater return. For example, a married couple partnering their Roth IRAs with their son’s Coverdell ESA to buy a property. After flipping the house each of the investors saw their percentage of interest returned, with the son’s smallest IRA out of the three netting a $2,500 growth. ...

  • 3 tips for reducing taxes on your retirement income

    Minimizing taxes for future retirement income is not always easy, but it is very important for putting together an effective retirement plan. For example, although many retirees expect to pay lower tax rates on their IRA or Individual 401k after they have left the workforce, their tax rates may still go up due to social security taxes and medicare taxes.  Follow these three steps to reduce taxes on your retirement income and get the most out of retirement savings: 1. Learn about income tax advantages Despite what many people think, certain types of income are taxed differently from others. A few examples include: Capital gains Real Estate investments Earned income Unearned income If you buy a physical asset such as gold or an investment property, your tax rates for capital gains will be much lower than it would be for an ordinary earned income.  Also, if you sell a home you’ve lived in for the past five years, you may qualify to have a large portion of your capital gains excluded from your taxes (double the amount if you are filing jointly as a married couple) by completing a 1031 exchange. 2. Create a budget to keep your expenses low In order to reduce your taxes, you will want to stay ...

  • Should You Take an Early IRA Withdrawal to Pay Off High Interest Debt?

    One important step on the path to financial independence and security is getting yourself out of debt. Or, more accurately, it’s getting yourself out from under the burden of consumer debt (such as credit card debt) or any other debt that you have to carry at a high interest rate. In some situations, you pay interest to improve your overall financial situation; an affordable home mortgage, for example, can contribute to your long term security. But high interest consumer debt generally won’t help you reach your long term goals. While it’s generally best to avoid taking early withdrawals from an Individual Retirement Account (since you’ll miss out on the long-term tax advantaged growth of those funds, and you’ll never be able to repay your account for the amounts you withdraw early), in some limited situations it might make sense to make such a withdrawal in order to pay off your high interest debt. How is Your High Interest Debt Affecting Your Overall Financial Situation? The first thing to examine is how your current debt might be affecting your finances overall. For example, are you struggling to reduce the balance of that debt (perhaps just making the minimum payment each month on a high ...

  • Five Steps to Growing Your Self-Directed Roth IRA

    Your self-directed Roth IRA is likely the foundation of your retirement plan. It’s important to try to accumulate as much as possible in this account, so here are five steps for growing your self-directed Roth IRA. Make the Maximum Allowable Contribution Each and Every Year. It’s extremely important to make the maximum contribution to your self-directed IRA every year. For 2014, this means up to $5,500 across all IRAs (or $6,500 if you’re age 50 or older). By making the maximum contributions to your account year in and year out, you’ll give your money the longest possible time to grow on a tax-free basis. Even if you’re eligible to contribute to a traditional IRA and take a tax deduction, it still might be a better long term financial decision to make those contributions to your self-directed Roth IRA instead. Consider Your Investment Portfolio as a Whole. Chances are that your self-directed Roth IRA is not your only investment vehicle. It might not even be your only IRA. In order to be sure that your overall portfolio is adequately diversified, always evaluate your overall investment position by considering all of your investment and retirement accounts together. Avoid Penalties and Taxes. The next step in growing ...

  • It’s Never Too Late to Start Investing in a Self-Directed IRA

    We all know that the longer we save for retirement, the greater possible chance you’ll give yourself to reach your retirement goals. When we run the numbers, we see that an adult who begins saving for retirement in earnest at age 21 is going to be at a great advantage to someone who doesn’t begin seriously saving until age 35 or 40. For example, let’s take a look at two individual who are using their self-directed IRAs to save for retirement. The first person begins making $5,000 annual contributions to their account at age 25, and does so every year until age 67. The second individual doesn’t begin making those annual contributions until age 35, but again does so until age 67. Assuming an 8% annual rate of return, by the time those two people reach age 67, the first will have accumulated almost $1.8 million in their account, while the second will have accumulated less than $800,000 in their account. In other words, even though the second individual still began saving for retirement relatively early in life, the fact that they started saving ten years later than the first person resulted in an account that was less than half the value ...

  • Have You Made a Plan for Taking Distributions From Your Retirement Accounts?

    When most of us think about retirement planning, we tend to focus on the saving and wealth accumulation aspects of the process. That is, we plan how much we think we need to have accumulated by the time we reach our desired retirement age, in order to be able to lead the retirement lifestyle we want. But a truly effective retirement plan also gives a significant amount of attention to what happens after you’ve built your nest egg and reached your target retirement age. You also need to plan how you’re going to take distributions from your retirement accounts during retirement. Why Having a Plan is Important. In short, having a plan for withdrawing money from your retirement accounts is important because you don’t want to outlive your retirement savings. Since it’s impossible for anyone to know when they’re going to pass, it’s important to have a plan, and to build some cushion into the timing of how long you’re going to need to fund your retirement. Furthermore, this cushion can be vitally important if some of the assumptions you’re making now about your retirement don’t hold true. For example, you might not be able to work as long as you think. Or you ...

  • IRA vs. 401K, What You Need to Know

    You may just be starting to think about saving for retirement, or you may already be contributing to one or both of these types of accounts, but there are significant differences between IRAs and 401Ks that you should be aware of before deciding on which one you want to help build your savings. You may find that you qualify for one or both of these accounts and need help deciding which one to use for retirement, if not both. The biggest differences between IRA and 401K accounts are listed below. Qualification. Anyone can contribute to a traditional IRA as long as they are younger than 70 ½ years old. A Roth IRA requires a person make less than $117,000-132,000 in income annually, or less than $184,000-194,000 if married and filing a joint tax return. A Roth IRA also has no age requirement. For a 401K, you must work for an employer who provides 401K plans to their employees. Based on just these facts, you may already qualify for one or all three options. Read on to find out which one is best for you and your needs. Contributions. A traditional IRA and a Roth IRA allow you to contribute $5,500 per year, ...

  • The best options to invest your IRA contributions

    When planning for the future, one of the many options for contributing towards your retirement is an IRA. Both traditional IRAs and Roth IRAs offer secure and tested options to save for retirement. But you may want to consider taking advantage of the investment possibilities these accounts have to offer. Instead of leaving your contributions in a cash or money market account, invest it through a Self-Directed IRA. It’s possible to invest in private equity, oil and gas and even real estate, amongst other options. There are limits to each of these options, but also great potential benefits. Real estate With Self-Directed IRAs allowing you the freedom to invest in markets you already understand, real estate is a familiar investment opportunity. This familiarity may be one of the biggest benefits because it grants more confidence to investors and therefore opens up opportunities. Another potential plus of purchasing real estate with a SDIRA is tax benefits. Your investment gains remain tax-deferred or tax-free even on withdrawal, in the case of a Roth IRA. Of course, even with the familiarity a common investment like real estate offers, having a knowledgeable custodian of your IRA is still necessary to navigate the complexities of the IRS tax codes for ...

  • Checkbook IRA LLC Pros and Cons with Quincy Long Hosted by Cash Flow Depot (Teleconference)

    A very popular idea in the self-directed IRA industry is to have what some have termed a “checkbook control” IRA. These have been under attack by the IRS. Click the link below to listen to Quest Trust Company President H. Quincy Long talk about the dangers of Checkbook Control IRA LLCs Click Here To Listen

  • Mobile Applications to Help You Build Your Investment Portfolio

    The idea of managing your finances from a cell phone or mobile device isn’t as crazy as it might have seemed just a decade ago. For years now it’s been possible to log in to your bank or investment accounts, and even to conduct various types of basic financial transactions, all from a mobile device. But now, with the near ubiquity of smartphones and the rise of mobile applications (“apps”), there are even more powerful options at your disposal. Here’s a sample of some of the mobile applications you can use, for example, to help you build your investment portfolio. Monitoring Apps. The first type of mobile app to consider is one that lets you monitor your overall investment portfolio. You could simply log in to each of your various accounts in order to evaluate your investments, but that would take a lot of time, and you still wouldn’t have a single “snapshot” of your overall financial position. Consider an app such as Mint or SigFig to help you monitor your wealth across multiple accounts. Research Apps. Investment opportunities come and go quickly, so you’ll likely want to be sure that you can research various investment ideas whenever they come to you. In ...

  • Using Your Self-Directed IRA to Invest in Illiquid Assets

    When most investors think of investments they tend to focus on assets and asset classes that are relatively liquid. We’re talking about investments that you can trade in and out of relatively easily and at relatively low cost – things like stocks, mutual funds, banks CDs and the like. Liquidity means that your money is always available if you have an emergency or other pressing expense. (While it’s true that you may have to forfeit some of the interest you earned in order to liquidate a bank CD before maturation, the money is still there for you to use.) For this reason, there’s sometimes a tendency to avoid investments that are illiquid. These investments include assets like real estate and investments in private companies. If you ever need to sell these investments, you might find that it takes a bit of time to actually “cash out.” Some investors are reluctant to have their funds tied up in this way. Fortunately this type of illiquidity is perfectly consistent with the long-term investment timeframe of the self-directed IRA. Withdrawing money from a self-directed IRA before retirement generally incurs penalties (and in the case of a traditional account, taxes as well), so account holders are ...

  • Will This Be The First Year You’re Subject To Required Minimum Distributions On Your Self-Directed IRA?

    While the U.S. government wants to encourage individuals to save for retirement by providing tax incentives for using the IRA structure, they don’t want to forego the tax revenue entirely. For example, you’ll potentially be able to take a tax deduction for contributions you make to a traditional self-directed IRA, and won’t have to pay taxes on any investment growth or gains that occur and remain within your account, but you will have to pay taxes when you make withdrawals from your account. One important way that the IRS rules manage the balance between allowing tax breaks for retirement savings, but requiring that the account holder pays taxes at some point, is the set of rules on required minimum distributions (“RMDs”). RMD Basics. Once a traditional IRA account owner reaches age 70½, they must begin taking distributions from their account, and those distributions must meet certain minimum amounts that are calculated based on the account balance and the account holder’s age. The account holder must withdraw the calculated minimum amount from their account every year. It’s important to note that because the required minimum distribution amounts are only minimums, the account holder is always free to take larger or more frequent distributions from ...

  • 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 ...

  • Potential Benefits of Investing in Notes in an IRA

    For investors who want in on the real estate game, but don’t want the headache of owning a property, real estate notes are often a good compromise. Don’t get us wrong, notes do require a bit more work than the average investment, but there are plenty of options to fit anybody’s budget and time commitment. Below we will discuss the details of notes and some of their potential benefits. What are Real Estate Notes? In short, a note is a promise to pay back a sum of money under stipulations outlined in a contract. When a homeowner has stopped making payments on their mortgage, typically have very few options before the bank is forced to foreclose on them. However, an investor can jump in, purchase a note, and act in place of the bank over the homeowner’s mortgage. The investor can work out a more favorable repayment strategy for the homeowner that also benefits the investor with the interest payments. The investor can keep the note until the loan is payed off, at which point the investor will not be receiving payments or making money on the property anymore and must find another investment. Or, the investor can sell the renegotiated note ...

  • What is a Self-Directed IRA?

    Whether it’s a Traditional IRA or a Roth IRA, a Self-Directed IRA (SDIRA), gives you all the tax advantages of an IRA with the freedom and flexibility of a wider array of investment instruments. The opportunity to take control of your financial future with greater asset diversification is one reason to invest in a self-directed IRA. Regular IRAs allow investments in stocks, bonds, mutual funds, ETFs, and CDs.  With a self-directed IRA, your investment options increase to include real estate, tax lien certificates, private market securities, promissory notes, and other investment opportunities.  Building wealth with the tax advantages of an IRA while diversifying your retirement investment fund allows you to seek higher returns than a regular IRA.  Higher yields and less volatility are another advantage of an SDIRA. There are restrictions on what is permissible within IRS guidelines for an SDIRA.  For example, you cannot borrow money from your SDIRA, sell the property to it, or enter into deals with relatives for it.  You should also know that your IRA custodian cannot provide investment advice.  Your IRA custodian can and should advise you of all prohibited transactions for your SDIRA. The annual contribution limits are the same as a regular IRA: for those below the age of 50, $6000, ...

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