SECURE Act Changes for Retirement Plans You Need to Know Now

SECURE 2.0 Has Made Updates to Prior Changes That Affect IRAs and Other Plans in 2023 and Later

Provisions in the SECURE Act 2.0, signed into law late last year, affect retirement plans in several ways, including required minimum distributions (RMDs). We are sharing some of the new rules here, as they may affect your tax planning as well as your retirement savings goals.

Age at which to start taking RMDs

Among the big changes is the higher age at which retirement plan account owners must begin taking required minimum distributions (RMDs) from their accounts.

• Historically, the age at which account owners had to start taking RMDs was 70½. With the first SECURE Act (passed in 2019), that age was increased to 72. Then late last year, the SECURE Act 2.0 upped it to 73.
• However, because that latter law was enacted at the tail end of 2022, investors who are turning 72 this year have a reprieve and can begin taking their RMDs in 2024 if they prefer.
  • If you turned 72 last year (2022) and began taking those distributions, you must continue to do so.

NOTE: If you have a Roth account in your employer’s 401(k) plan, there will be no RMDs for those designated accounts starting in 2024.

Returning erroneous RMDs

Given the confusion about when to start taking required minimum distributions (2022, 2023 or later), there is a way to correct that—but the deadline is fast approaching.

• If you turned 72 in 2023 and erroneously took a required minimum distribution (which could have been delayed until next year), and you wish to return that money to your IRA, the IRS has extended the usual 60-day rollover period for those unneeded RMDs to September 30.
  • When returning that unneeded money to your IRA, you must include any amount of taxes that were withheld to avoid it being treated as a taxable distribution.
  • As always, we strongly recommend you consult your financial or tax advisor before making any changes.

RMD penalty waivers

Thanks to SECURE 2.0, the penalty for a missed RMD is now cut in half, reduced to 25% of the amount not taken. If you correct that error quickly (in whatever way the IRS deems “quickly”) that penalty may be reduced to 10%.

Inherited IRAs

Before the original SECURE Act, beneficiaries were allowed to stretch their inherited IRA distributions over their lifetimes. However, most qualified beneficiaries who inherited IRAs on or after January 1, 2020 fall under the SECURE Act provision that requires they withdraw those funds completely over a 10-year period. (There are some exceptions such as surviving spouses.)

After some changes by the IRS in the RMD rule for inherited IRAs, there will be no penalties for RMDs that were not taken in 2021 or 2022 and the IRS has waived the RMD requirement for beneficiaries of inherited IRAs subject to the 10-year rule. However, the beneficiaries are still required to take full distribution of the inherited IRA account within 10 years.

If you are among those beneficiaries required to withdraw the funds over the 10-year period, you should consult with your trusted advisor to map out your distribution schedule and amounts that work best for your financial circumstances. If the retirement account is a Roth IRA and the original owner did not meet the five-year rule prior to death, be aware that this will affect that distribution timeline.

New Roth IRA opportunities

SECURE Act 2.0 expanded the types of workplace retirement plans that can use Roth features.

• Self-employed individuals or small-business owners may now open a Roth SEP IRA or a Roth SIMPLE IRA.
• Taxpayers with 529 plans for education may now roll the plan’s unused funds into a beneficiary’s Roth IRA starting in 2024. There are limitations to this rule regarding the lifetime rollover cap ($35,000), annual contribution limits for rollovers (currently $6500), and length of time the 529 has been open (at least 15 years) in order to make those rollovers. Additionally, contributions and earnings made in the last five years cannot be rolled over.
• If you have a Roth employer plan (such as a 401(k) with a Roth option), ask your plan administrator about the new requirements regarding catch-up contributions and the option to treat employer contributions as Roth contributions. There are also increased contribution limits for IRAs and 401(k) due to inflation to be aware of.

Increased contribution limits for 2023

With inflation in mind, the IRS has increased the contribution limits for IRAs and qualified workplace retirement plans. This includes solo(k) and other self-directed retirement plans. You’ll find all the figures, income ranges, and deductibility guidelines on the IRS website.

Contact Next Generation to discuss your self-directed IRA

With all the updates, it’s no wonder taxpayers are wondering which of these apply to them and how. If you have a self-directed IRA or solo(k), ESA, or HSA with Next Generation, please contact us to discuss how these changes may affect your retirement plan. We’re available via email at NewAccounts@NextGenerationTrust.com or by phone at 888.857.8058.

COLA and Social Security

The cost-of-living adjustment for 2024 is projected to be around 3%

Given the high rate of inflation that Americans contended with last year, the cost-of-living adjustment (COLA) for Social Security benefits in 2023 was set at a near-record 8.7%. This annual adjustment, based on consumer price index data, is meant to help retirees and others who are collecting Social Security keep up with expenses. The average inflation rate in 2022 was 8% so this higher-than-usual COLA made sense, given the economic environment.

This year, we’re glad to see that high inflation is becoming a thing of the past. Statistics released by the U.S. Department of Labor in July show the annual inflation rate for the United States was 3.0% for the 12 months ended June 2023. Big difference!

COLA projection for 2024

The Senior Citizens League—an independent citizens’ action and education non-profit organization— estimates the Social Security COLA for 2024 will be 3.1%. It derives its estimate from changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This is the same index the Social Security Administration uses, but it calculates its benefit adjustment for the following year based on average inflation in the third quarter (reflected in the CPI-W). Therefore, we won’t know the exact percentage rate of the 2024 COLA until October.

For those interested in some COLA history, the Senior Citizens League noted that over the past 23 years (January 2000 to February 2023), Social Security COLAs increased benefits by 78% with an average annual increase of 3.4%.

Where We See Inflation Right Now

This spring (April figures), Americans saw the biggest price increases in housing, gasoline, motor vehicle insurance rates, and used vehicles. Food prices (food at home) went down a little between March and April (reduced by 0.2%); food “away from home” rose slightly, 0.4%.

For those of you who love statistics and charts, CNBC has published a chart of May 2023 price changes (year-over-year), by expense category. Gasoline and health insurance prices dropped by around 20% but at the top of the increase pile are motor vehicle repair at 19.7% and motor vehicle insurance at 17.1%. So, it appears it is less expensive to fuel a vehicle but more expensive to own one this year.

How COLA and Inflation Affect Retirees

The Senior Citizens League has new research about the buying power of Social Security benefits. It’s no secret that Americans are dealing with higher prices on many items. This can hit retirees especially hard when they are relying strongly on their Social Security benefits for retirement income. The study revealed that:

• Since 2000, those benefits lost 36% of their buying power to inflation. However, in last year’s study, the buying power lost was 40% so there is a bit of an improvement in 2023 as the inflation level moderates.
• This lower buying power means retirees would need an extra $516.70 per month ($6,200 per year in 2023) to maintain their 2000 level of purchase power.
• During this same period (2000 to 2023), the cost of goods and services typical retirees purchase rose 141.4%, which averages around 6.2% annually.
  • For example, $100 spent on groceries in 2000 would only buy about $64 worth in 2023. People on a strict budget surely feel that pinch.

Plan for a More Comfortable Retirement with a Self-Directed IRA

Social Security was never meant to represent a person’s entire or majority of retirement income, but it has become that way for too many Americans facing high costs of living and low rates of savings. Even the more diligent savers among us may come up short in terms of the amount of money they’ll need for a comfortable retirement.

But taxpayers who take a long-term, proactive approach to their retirement and are comfortable making their own investment decisions can design a different future–even while building their careers and/or raising a family.

That approach is funding a self-directed IRA and including alternative assets within their plan. It’s a strategy for investors who know and understand certain assets that typical retirement plans don’t allow—and they may already be investing in outside of their existing retirement plan. Self-direction also enables account owners to build a more diverse portfolio that creates a hedge against stock market volatility (and haven’t we seen enough of that since 2000?).

For example, if you are already investing in vacation properties or hedge funds outside of your existing retirement plan, you could open a self-directed IRA and include those assets within a tax-advantaged retirement plan. If investing in royalties or commodities excites you, you can make those investments within a self-directed IRA as well—with the potential to build more lucrative retirement savings over time.

Next Generation is Here to Help

The team at Next Generation is committed to client education and service. We invite you to watch our on-demand webinars about various asset classes, schedule a complimentary education session, or sign up for our newsletter (look for the link at the top of each website page).

On social media, you can follow us on LinkedIn, Twitter, Instagram, and Facebook, where we share information about the nontraditional investments allowed in self-directed IRAs, HSAs, and Coverdell education savings accounts.

Need help by phone or email? Call us at 888-857-8058 or email NewAccounts@NextGenerationTrust.com.

Are You Accurately Assessing Your Retirement Readiness? Even wealthy taxpayers can be off the mark about their retirement savings.

The Center for Retirement Research (Boston College) reported recently that more than 25% of all U.S. households are confident that they will maintain their current standard of living when their retire. However, as the Center discovered, they are at risk of not having enough savings. Even affluent Americans are overly confident about their financial preparedness for their retirement years—even more so than other households.

Every three years, the Center for Retirement Research constructs the National Retirement Risk Index (NRRI) based on assets such as Social Security, retirement plans, and home equity. In its most recent NRRI, 40% of households are “in good shape and know it,” 20% are in bad shape and know it, and 28% were “not worried enough.”

Of note is that among high-income households, 32% of that cohort were “not worried enough” regarding retirement risk. Therefore, in spite of being among the most financially comfortable, they might not be saving enough during their working years for their future retirement. That could spell trouble for people who expect to maintain current spending levels and lifestyle choices; they may have to curtail spending or lower their expectations for those golden years.

The authors of the Center report concluded that a strong housing market (and before 2022, a strong stock market) may have created an illusion of wealth for affluent households who disproportionately own those financial assets,

 

Factors Affecting Retirement Readiness

Americans’ longevity is forcing us to stretch retirement savings over a longer time horizon. Plus, the gradual rise in the full retirement age for Social Security has put a crimp in many people’s ability to cover their usual expenses more easily.

Traditional employer-sponsored pension plans are being replaced by 401(k) and other qualified retirement plans that require employees to contribute as well.

Millions of other workers have no access to a workplace retirement plan (although of course, they could open an IRA any time if their income level and monthly budget allows for periodic contributions). Therefore, the convenience of the automatic payroll deduction for retirement savings is not available to them.

Competing priorities for hard-earned money means putting money aside for children’s college, paying off one’s student loans, or saving to buy a house. Saving for future health-related costs is also a factor.

 

Ready or not: The Wealthy Underestimate Their Retirement Risk

The Center for Retirement Research found that nearly one-quarter of affluent households that underestimated their retirement risk are carrying a large amount of housing debt relative to the equity in their homes—three times more than what middle- and lower-income earners are saddled with. And given that Social Security will replace a smaller portion of their annual income than those in lower income ranges, they will have less proportionally to rely on in retirement; therefore, they must save a lot more to maintain their standard of living.

 

Get Prepared With a Self-Directed IRA

Just ask Sen. Mitt Romney, who built enormous wealth through his self-directed IRA: including alternative assets in a self-directed retirement plan enables savvy investors to build more diverse portfolios, with the potential for more lucrative savings. And, you needn’t be a well-connected public figure, or a wealthy person, to self-direct your retirement plan—just confident in your investment knowledge about the different alternative assets these plans allow.

The investment strategy involved in some self-directed transactions (such as Senator Romney’s initial investments) can be quite complex; others are as simple as researching and understanding what it takes to include precious metals or real estate in a self-directed IRA. Many people include private equity funding, unsecured and secured loans, royalties, mineral rights, and many more alternative assets.

In addition to Traditional and Roth IRAs, you may open a SEP IRA, SIMPLE IRA, or solo(k) for small-business owners. You can also self-direct a health savings account or Coverdell education savings account.

 

Self-Directed IRAs at Next Generation

At Next Generation, we’ve found that self-directed investors are generally a confident bunch, but there are always questions that arise about nontraditional investments allowed in self-directed IRAs. That’s why we invite you to schedule a complimentary education session with one of our helpful professionals, who can answer your questions about the broad array of alternative assets that can be included in a self-directed plan. You’ll find information about all the documentation you’ll need to open and fund your account in our starter kits. Or you can watch a webinar or download one of our white papers.
Of course, if you prefer, feel free to contact us by email at NewAccounts@NextGenerationTrust.com or call (888) 857-8058 during business hours. We’re always ready to help!

Planning a Retirement Spending Spree? Be Sure to Plan on Having Ample Retirement Savings!

Retirees and those collecting Social Security enjoyed a significant boost in the cost of living adjustment (COLA) in 2022 and 2023. The 2023 COLA of 8.7% was the largest in 40 years.

It appears that older Americans have also been enjoying something of a spending spree, according to Bank of America Institute’s Consumer Checkpoint. Based on data from debit and credit card transactions, the publication reported that the spending growth among baby boomers (ages 59 to 77 today) and the traditionalist generation before them (78 to 95 years old) surpassed the spending of younger generations—tied partially to that bump in Social Security benefits. And that spending was happening across income levels.

Other factors in the intergenerational spending disparity include lower housing costs and lower debt for retirees than for Generation X and millennials, who are challenged by high rent and high mortgage rates, and student loan repayments.

In short, it appears from this report that many retirees are spending relatively freely right now. But with all the chatter about the Social Security trust fund’s shaky future, and the cost-of-living adjustment predicted to be much lower next year (around 3% according to the Senior Citizens League), are you prepared to be a spendthrift retiree?

Enhance your retirement readiness with a self-directed IRA

Whether you are just starting your career or are in those pre-retirement years, you can open a self-directed IRA and set your savings goals differently—with a comfortable budget during your retirement years. A self-directed IRA enables you to diversify your portfolio with alternative assets that are not allowed in typical retirement accounts.

Those assets’ performance is not correlated with the stock market, so they create a hedge against the market volatility we’ve been experiencing for years. And you can take advantage of investment opportunities in more creative ways, using what you already know and understand to build your retirement savings.

Invest in alternative assets to build retirement savings

You can include investment properties, royalties, precious metals, private equity funding, and many more alternative assets in a self-directed retirement plan, with the same tax advantages of traditional retirement accounts. Taking a long-term investment view, you can get off the stock-and-bond roller coaster and continue to build retirement savings that can help you reach your retirement income goal.

Taking control of your investing through self-direction is empowering—and can better prepare you for a lifestyle that is not solely dependent on Social Security benefits or the whims of stock market returns. Before you map out that future spending spree, we invite you to schedule a complimentary education session with one of our self-direction experts at Next Generation. You can also learn more from our on-demand webinars and other blog articles that cover the many options and benefits of self-direction as a retirement wealth-building strategy.

Provisions that Affect Retirement Plans

The SECURE Act 2.0 was signed into law in late December 2022. Out of the 100+ provisions contained in the bill, many have a direct effect on retirement plans (both IRAs and employer-sponsored retirement plans). In this article, we outline some of the provisions that affect retirement plan contributions and in turn, affect account owners’ or plan participants’ retirement savings strategies.

Changes to RMDs

The age for taking required minimum distributions (RMDs) had already been raised in the original SECURE Act to 72. Secure 2.0 raises the RMD age to 73 this year and starting in 2033, this will go up to age 75. SECURE 2.0 also reduces the penalty for individuals who fail to take an RMD, from 50% to 25%.

SECURE 2.0 eliminates RMDs for qualified employer Roth plan accounts beginning in 2024.

NOTE: For employees in workplace 401(k), 403(b), and 457(b) plans, designated Roth account assets will no longer be subject to pre-death RMD rules starting in 2024.

Increased Catch-up Contribution Limits

Taxpayers ages 50+

• IRAs: Individuals age 50 and up with Traditional and Roth IRAs have been stuck with maximum catch-up contributions of $1000 for years. However, starting in 2024, the IRS catch-up limit will automatically adjust for inflation in increments of $100.

• SIMPLE plans: the catch-up contribution limit is $3500 for 2023 (up $500 over last year).

• Qualified plans: Workers in 401(k), 403(b), and 457(b) retirement plans may now contribute an additional $7500 (on top of the annual federal limit of $22,500) in 2023.

Taxpayers ages 60-63

Starting in 2025, taxpayers who are 60-63 years old will be able to contribute more to their retirement plans as follows:

• Qualified plans: the greater of $10,000 or 150% of the standard catch-up contribution limit for 2024 (indexed annually for inflation).
  • Starting in 2026, the $10,000 will be adjusted for inflation annually.
  • Upon reaching age 64, the regular catch-up contribution limit applies.

• SIMPLE IRAs: the greater of $5,000 or 150% of the SIMPLE IRA catch-up contribution amount, indexed for inflation. 

High-earning taxpayers

For employees with more than $145,000 in wages, SECURE 2.0 now requires them to make catch-up contributions only to Roth accounts. This applies to 401(k), 403(b), and 457(b) government plans (excluding “special catch-up” contributions to 403(b) or 457(b) plans). Therefore, some employees who are 60-63 years old and are eligible to make larger catch-up contributions must make them to a Roth account. Those funds will be contributed with after-tax dollars but will be tax-free upon withdrawal. This rule becomes effective in 2024. 

SEP and SIMPLE IRAs, Qualified Plans: New Roth Feature

Employees may choose to treat employer contributions to these plans as Roth contributions if the employer permits. This is effective for 2023 and later taxable years.

The same goes for qualified 401(k) defined contribution plans, 403(b) plans, and governmental 457(b) plans; participants in these workplace retirement plans may treat employer matching and nonelective contributions as designated Roth contributions if this option is permitted by the plan design. 

Student Loan Payments and Employer Contributions

Effective in 2024, employees who are making student loan payments can also save for retirement. That’s because they may qualify for matching employer contributions in an employer-sponsored retirement plan (without having to make the contributions themselves).

In addition, matching contributions made on qualified student loan payments may be designated as Roth contributions. There are certain conditions regarding employer contributions, so we recommend you consult your plan administrator for guidance on this provision.

Hardship Withdrawals for 401(k) and 403(b) Plans

Employees will be permitted to take emergency distributions from their retirement account of up to $1000 once a year, starting in 2024. These withdrawals are to cover immediate financial needs or unforeseeable emergencies. Examples of these (for which the employee may self-certify with the plan administrator) are medical care, funeral, tuition, and home purchase or certain home repair expenses. The 10% early withdrawal tax will not apply to these distributions. Taxpayers who do not repay the distribution within a certain amount of time will be prohibited from taking another emergency withdrawal for three years. 

529-to-Roth Rollovers

Effective in 2024, some taxpayers will be allowed to roll over a 529 plan they have maintained for at least 15 years to a Roth IRA. There are many requirements and limited circumstances to qualify for this transaction. The lifetime limit on what may be rolled to the Roth IRA will be $35,000. 

401(k) Lost & Found

It is not unusual for employees to lose track of their 401(k) account when changing jobs; nor is it unusual for employers to end up with missing participants—former employees they cannot locate to distribute retirement benefits. The federal Department of Labor will be creating a searchable database within the next two years to help reconnect millions of 401(k) accounts with the individuals who are missing out on their unclaimed benefits.

Qualified Charitable Distributions

A qualified charitable distribution (QCD) is a transaction available to individuals ages 70-1/2 and older who wish to direct funds from a Traditional IRA to a qualified 501(c)3 charitable organization. Currently, the maximum contribution amount allowed is $100,000. This will change in 2024 when the maximum QCD amount will increase based on the inflation rate.

SECURE 2.0 broadens the charitable distribution field this year, with a one-time opportunity to distribute up to $50,000 (indexed for inflation) to fund a charitable remainder unit trust, charitable remainder annuity trust, or a charitable gift annuity.

Contact Next Generation with Questions About Your Self-Directed IRA

Whether your retirement savings are in a self-directed IRA, solo K, or other self-directed retirement plan, the team at Next Generation is here to help. If you have questions about how any of the SECURE Act 2.0 provisions may affect your self-directed plan, contact us at 888.857.8058 or NewAccounts@NextGenerationTrust.com.

Protecting Your Retirement Savings During a Market Downturn

Retirement Account Protection in a Time of Market Downturn

As we all know, the stock market has had a rocky road since early 2022, which is continuing today (late second quarter of 2023 at the time of this writing). Given world events, inflation, and an economy that runs in fits and starts, knowing how to treat one’s retirement plan during a market downturn is a $64,000 question for many investors.

Plan for retirement success: fund your retirement account

As we’ve said many times, save often! Contributing to your IRA or employer-sponsored plan as often as you can—and meeting contribution limits—will help you establish a solid base, even when the market gets a bit wonky. Don’t let that volatility scare you away from funding your retirement account consistently; stay the course with a funding strategy that works best for your current financial situation and your future retirement plans.

Avoid early withdrawals

Don’t give into the temptation to take distributions before age 59-1/2 during a downturn. Taking early withdrawals will trigger a 10% penalty plus the tax on that income. Remember, saving for retirement is a long-term game. Talk to your trusted advisor about making a shift in strategy perhaps, and let those funds continue to grow in your tax-advantaged retirement plan. If you are still working through your 60s, keep in mind that the age at which required minimum distributions from your retirement account must begin is newly set at age 73, effective this year.

Develop a plan for a comfortable retirement

These are elements to consider when planning for retirement; these help you create a retirement savings road map. They’re not only for periods of economic/market downturn—they are critical pieces of your retirement road map at any time.

• When you plan to stop working full time (and therefore, at what age you plan to retire) – remember, this is a road map and you can course-correct as needed

• When you plan to claim your Social Security benefits (at full retirement age or age 70), and how much your monthly benefit will be

• Part-time work during retirement years – if you will be working part-time after you say “I’m retired,” is that a part-time job with a different employer? A part-time arrangement with your current employer? Or will you do consulting or freelance work in your field as a 1099 independent contractor?

• Preferred lifestyle – what will you spend your money on?
  • Do you look forward to a more home-centric life?
  • Will you enroll in lifelong learning classes?
  • Are there hobbies to engage in (and which may need some money to enjoy)?
  • Is world travel on the retirement map?
  • Will you indulge in your love of theatre, concerts, museum visits, or other arts?
  • How often do you plan to dine out with friends and family? 

• Retirement residence – think about whether you will stay in your current home (and for how long), downsize, or move to a different part of the country (which may be more or less expensive than where you reside today)

• Remember to factor in potential medical expenses you may incur in later years — some estimates peg that amount at around $295,000 for the average retiree

Create a protective shield for your retirement savings: a self-directed IRA

Typical retirement accounts include stocks, bonds, and mutual funds—all subject to market volatility. However, saving for retirement with a self-directed IRA enables you to create a hedge against market volatility while diversifying your portfolio with a broad array of alternative assets typical plans do not allow.

With a self-directed IRA, you can include nontraditional investments that you already know and understand—and may already be investing in outside of your existing retirement plan. You can take advantage of interesting investment opportunities that arise with greater agility. And you can create a long-term investing strategy with assets whose performance is not correlated with the stock market.

There are so many ways to build retirement wealth by including alternative assets within a self-directed IRA. Assets that you can include in that protective shield around your retirement savings include (but are not limited to):

• Real estate
• Precious metals
• Private equity
• Commodities
• Royalties
• Mineral rights
• Unsecured and secured loans
• Impact/ESG investments
• Tax liens

Contact Next Generation to get started

Next Generation offers full administration of self-directed retirement plans as well as custodial services for the assets within those plans. If you need more information about all the benefits and options of self-direction as a retirement wealth-building strategy, you can schedule a complimentary education session with one of our knowledgeable team members. If you are ready to open a new self-directed IRA or another type of account (such as a solo 401(k), HSA, or Coverdell ESA), you can go to our starter kits for the forms and step-by-step instructions.

Still have a question? You can text us through our website, or contact Next Generation by email at NewAccounts@NextGenerationTrust.com or by phone at 888.857.8058.

Spring Into Retirement Savings with a Self-Directed IRA

The trees are budding, flowers are blooming, and breezes are warming throughout most of the United States. And in self-directed IRAs across the land, alternative assets are offering more creative ways to save for retirement, while providing a hedge against growing concerns around the volatility of the stock market.

There’s still time to maximize your savings by contributing to a new account for both 2022 and 2023—for Traditional and Roth IRAs, that is up to $6,000 for 2022 ($7,000 if you are age 50+) and $6,500 for 2023 ($7,500 if you are age 50+). You have until the tax day deadline, which is Tuesday, April 18^th, to take advantage.

So, what’s an account owner to do with those funds?

Grow your retirement savings through self-direction

By opening a self-directed IRA this spring, you open the door to a wide array of investment options that can be included in these types of accounts.

A self-directed IRA enables you, the investor, to build a more diverse retirement portfolio by investing in assets you already know and understand—and might already be investing in outside of your existing IRA.

The idea behind self-direction is that the account owner is truly self-directed—comfortable making all investment decisions, doing all the research and due diligence on the investment, and directing one’s retirement portfolio quite actively (but there are plenty of more passive opportunities out there as well!). The plan administrator executes the transactions upon the account owner’s instructions and the custodian holds the assets on behalf of the IRA.

Why a self-directed IRA?

Unlike typical brokerage accounts that limit your IRA to stocks, bonds, and mutual funds, self-directed IRAs can include a broad array of nontraditional investments. These include real estate, precious metals, royalties, private equity, secured and unsecured loans, and many more. You can read up on this on our FAQ page.

In short, if a certain investing opportunity arises that makes sense for your retirement saving goals, you can go for it within your self-directed IRA. You can include assets that align with your values, such as certain ESG investments and social causes. These alternative assets tend to not correlate with the stock and bond markets, so typically, they deliver returns over the long term without the volatility many other investors experience. And you’ll get the same tax advantages as a regular IRA, whether those retirement savings grow tax-deferred or tax-free.

Take a fresh look at your retirement savings this spring

When spring is in the air, it brings a feeling of renewal to many people. It’s a great time to renew your commitment to saving for retirement—perhaps in a new way with a self-directed IRA. If you have questions about this retirement strategy, you can schedule a complimentary educational session with a Next Generation representative who will explain how self-directed IRAs work and the many options available through these plans. We invite you to watch our on-demand webinars as well, which focus on various alternative asset classes. You can always call us at 888.857.8058 or email NewAccounts@NextGenerationTrust.com. At Next Generation, we love to talk about self-directed retirement plans at any time of the year!

Jaime Raskulinecz, CEO of Next Generation Services, Shares Insights About Prohibited Transactions in Self-Directed IRAs With Forbes Finance Council Readers

Article Explains Common Errors Investors Make Related to Alternative Assets Within Self-Directed Retirement Plans

ROSELAND, NJ, March 27, 2023 /24-7PressRelease/ — Jaime Raskulinecz, founder and CEO of Next Generation Services, LLC, has published an article in the Forbes Finance Council column titled, “Why You Need to Understand IRA Prohibited Transactions.” In it, she explained what constitutes a prohibited transaction according to IRS guidelines, and common errors self-directed investors make that are related to the alternative assets allowed within self-directed IRAs.

Self-direction allows investors to include many alternative assets—such as real estate, precious metals, private equity funding, and royalties—within their retirement plans. Next Generation provides comprehensive account administration and asset custody for its clients who self-direct their retirement portfolios. As such, Next Generation’s transaction support team ensures that clients’ investments comply with IRA guidelines. However, as Raskulinecz noted in her article, there are three common errors investors make in relation to those assets, that create a prohibited transaction.

“The three types of prohibited transactions investors should avoid are per se, which is engaging in a transaction with a disqualified person; extending credit from the IRA to a disqualified person; and self-dealing, in which the IRA owner or other disqualified person benefits from the retirement account’s investments,” said Raskulinecz. “It is important to understand these, to avoid losing the tax-advantaged status of the self-directed retirement plan and trigger unfavorable tax consequences.”

The article contains several examples of how prohibited transactions may occur with different types of alternative assets, and the negative tax consequences that ensue. You can read the full article here.

To learn more about Next Generation Services or self-direction as a retirement strategy, visit www.NextGenerationTrust.com.

About Next Generation Services, LLC
Founded on the philosophy that every person should have control over their retirement plans, Next Generation educates consumers and professionals about self-directed retirement plans and nontraditional investments, a strategy at one time reserved only for the very wealthy. Next Generation Services provides comprehensive account administration and transaction support, and its sister company, Next Generation Trust Company, acts as custodian for all accounts. The neutral third-party professionals at Next Generation expertly guide clients and their trusted advisors as part of their white glove, personalized service for a seamless transaction experience from start to finish. For more information, visit www.NextGenerationTrust.com, or contact Next Generation at 888.857.8058 or NewAccounts@NextGenerationTrust.com.

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Next Generation Services Announces that all Eligible Staff Members Have Earned SDIP Designation from RITA

Employees Have Met all Qualifications as Self-Directed IRA Professionals from the Retirement Industry Trust Association

ROSELAND, NJ, March 24, 2023 /24-7PressRelease/ — Jaime Raskulinecz, founder and CEO of Next Generation Services, LLC, has announced that all team members directly involved with client services, marketing, sales and operations have earned the designation of self-directed IRA professional (SDIP) from the Retirement Industry Trust Association (RITA).

The SDIP certification program is for professionals who exhibit dedicated technical, operational and compliance-oriented expertise regarding self-directed IRAs. According to the RITA website, the certified SDIP designation signifies that an individual working in the self-directed IRA industry has attained comprehensive training in IRA alternative investments, UBTI, anti-fraud measures and disclosures, IRA documentation, reporting, eligibility and contribution requirements, IRA portability and distributions.

Next Generation provides comprehensive account administration and asset custody for its clients who self-direct their retirement portfolios. Self-direction allows investors to include many alternative assets—such as real estate, precious metals, private equity funding, and royalties—within their plans.

“Given our dedication to client service, we all recognize the importance of being knowledgeable about all aspects of self-directed retirement plans,” said Raskulinecz. “The demonstrated expertise of our team is applied every day in how we administer our clients’ accounts, and provide client education.”

Staff members of Next Generation earned the certified SDIP designation as follows:

• Jaime Raskulinecz, Founder & CEO, January 2020
• Karen Jung, Director of Finance, March 2020
• Kyle Schickram, Operations Manager, January 2016
• Bill Wittler, Transactions Manager, May 2016
• Emma Olson, Client Service Supervisor, January 2020
• Jack Malpass, Business Development Specialist, May 2021
• Lisa DeSimone, Client Service Associate, July 2022
• Erica Figueiredo, Marketing Specialist, June 2022

Criteria for SDIP designation
Candidates for the SDIP designation must have a minimum of two years of dedicated IRA operational and technical expertise, after which they attend the RITA IRA Advanced Institute and pass the RITA IRA Advanced Institute exam. Additionally, candidates must either pass the RITA IRA Fundamentals test or have a CISP (Certified IRA Service Professional) designation, which is administered by the American Bankers Association; Schickram and Wittler both have CISP designations as well.

Successful SDIP candidates also require a letter of recommendation attesting to their professional qualifications and experience in the field. SDIP designees must maintain their certification via continuing education on an annual basis.

More information about RITA and SDIP certification can be found here. To learn more about self-direction as a retirement strategy, visit the Next Generation website at www.NextGenerationTrust.com.

About Next Generation Services, LLC
Founded on the philosophy that every person should have control over their retirement plans, Next Generation educates consumers and professionals about self-directed retirement plans and nontraditional investments, a strategy at one time reserved only for the very wealthy. Next Generation Services provides comprehensive account administration and transaction support, and its sister company, Next Generation Trust Company, acts as custodian for all accounts. The neutral third-party professionals at Next Generation expertly guide clients and their trusted advisors as part of their white glove, personalized service for a seamless transaction experience from start to finish. For more information, visit www.NextGenerationTrust.com, or contact Next Generation at 888.857.8058 or NewAccounts@NextGenerationTrust.com.

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