self directed IRA plans

The stock market took investors on a wild ride in earlier this year that left many wondering how to protect their futures against these crazy ups and downs.

Chances are, if you do not have a self-directed retirement plan, you are more vulnerable to market meltdowns. When you self-direct your IRA or other retirement plan, you are taking control of your retirement savings, not waiting for stock brokers and financial institutions to make decisions that affect your future, or remain dependent on the typical investments they are able to sell.

Regardless of whether you are working with a financial planner or making your own investment decisions, you are well served to keep these strategies in mind when it comes to the market to show your IRA a little love.

Dollar Cost Averaging

Dollar cost averaging is fairly easy and something we should all do; it’s simply contributing a fixed amount of money into a retirement account. That way, when stock values dip, as they often do, your contribution buys more shares for less money. Determine a monthly amount you can afford to put away in your Traditional or Roth IRA, and continue to grow your account’s value on a steady basis.

If you have an employer-based 401(k) account, you might already be employing dollar cost averaging through a plan that invests on a consistent basis. Either way, through dollar cost averaging, you’ll have an investment plan that takes advantage of market selloffs and enables you to participate in strong markets as well.

Target-Date Funds

Target-date funds shift their concentration over time. The investing time line might start out with your account being heavily invested in stocks and, as you approach retirement age, shift to less volatile assets (such as bonds). This gives you a cushion to recoup any potential losses in a shorter window of time. Boring but good for investors who are averse to risk. Whether you are working with a financial planner/brokerage firm or buying these funds on your own, be sure to understand the balance between stocks and bonds, since not all target-date funds are the same. You should also understand your options in terms of stocks vs. bonds, investment timeline, and your retirement horizon. Maybe you’ll be satisfied and comfortable with a 50-50 split between stocks and bonds at an advanced age, maybe not. Also research the interest rates associated with these funds.

Keeping Pace with Living Costs

Many Americans worry that their retirement savings won’t be enough to maintain the desired lifestyle they want after they stop working. Therefore, take a look at what you’ll have from savings combined with sources of guaranteed income (such as a pension).

However, with corporate pensions disappearing and Social Security perennially endangered, that guaranteed income might be hard to come by when it’s time for your retirement. So how to keep up with your living expenses?

One way savvy investors prepare is through a self-directed retirement plan. They can include many alternative assets in these plans, far more than stocks and bonds. These nontraditional investments have the potential to build up more lucrative retirement savings—and certainly more eclectic plans—without being reliant on the same old-same old. For example:

• Are you an ace researcher when it comes to alternative investments? If so, you might want to apply those skills to a self-directed retirement plan.
• Are you already making real estate investments outside of your existing IRA? Why not make them in a self-directed IRA and grow your savings that way?
• Are you comfortable setting up the terms of a loan with someone? You can have your self-directed retirement plan make the loan and earn that interest.
• Have you always dreamed of investing in a cash crop or precious metals? Did you know you can include those investments in your self-directed retirement plan as well?

Next Generation Trust Services makes it easy to get started with some TLC of our own. Our Starter Kits and online tools help self-directed investors open their accounts and make their transactions as expediently as possible.

Have a question about your account?

Contact our helpful self-direction professionals at (888) 857-8058 or Info@NextGenerationTrust.com, read our white papers, or peruse our blog for helpful tips and retirement TLC.

Stay on Track with a Self-Directed Retirement Plan.

We’ve all heard it before: improve your odds for a more comfortable retirement by staying focused with a solid financial plan. Sounds easy, but given the shifts in the markets, rising cost of living, and other factors (personal issues, family emergencies, etc.), it can be a challenge for many Americans. Here are some things to consider as you lay out your route to retirement.

Save enough.

You can’t fund your retirement years if you haven’t saved for them. Start early and save often; even a little bit every month adds up over time. Be disciplined and, if something comes up to disrupt your savings regimen, get back on track as soon as possible. A Boston College Center for Retirement study suggests a target of 15 percent of your income a year.

If you are older, nearing retirement age, and got a late start on funding your IRA or other retirement plan, you can always make catch-up contributions. Also, take a look at your discretionary spending to see if there are places to trim back the fat to keep your savings on track (or to ratchet it up).

Have an investing strategy that makes sense for you.

Find a financial adviser you trust and can work with to devise a plan that works for your lifestyle and unique situation. This includes the types of investments to make in your retirement portfolio as well as your tolerance for risk and your knowledge about various types of investments.

Fine-tune your retirement plan along the way.

Since your life will change over time—new careers, income levels, family situations, etc.—be sure to revise your retirement planning from time to time. Financial markets go up and down, health expenses may arise—there’s a lot to consider and so a periodic reassessment will serve you well.

Include nontraditional investments in your retirement plan.

If you’re someone who prefers to make your own investment decisions, and you want to include alternative assets in your retirement plan, opening a self-directed IRA is a great way to stay on track to meet your retirement goals. This is where understanding many different types of investments can help you get on a fast track to retirement wealth, depending on the kind of nontraditional investments you are familiar with.

Self-directed investors are including real estate, precious metals, unsecured loans, hedge funds, commodities and much more in their retirement plans—alternative assets they already know and understand, and are willing to thoroughly research before sending instructions to the plan administrator.

Self-direction enables savvy investors to choose a different track for their retirement route. At Next Generation Trust Services—a third-party administrator of self-directed retirement plans—we have clients who are including a broad array of non-publicly traded alternative assets within their plans. They research the investment, send us instructions in order to expedite the transaction, and we manage all the paperwork and filing related to the account.

Want to know more?

Contact our helpful professionals at (888)857-8058 or Info@NextGenerationTrust.com

If you’re already in the know about self-directed retirement plans, check out our Starter Kits to open an account today.

The millennial generation (Gen Y) is the group comprising people ages 18 to early 30s (more or less), right behind Gen X. According to a report issued by the White House’s Council of Economic Advisors, they are a lot of things: the largest generation, comprising one-third of the US population now; the most diverse and most educated; and very tech savvy. This generation is busy studying or starting careers and getting involved in their communities and social causes.

But how involved in their retirement plans are they being? And can they overcome the two financial downturns that came in the wake of 9/11 and of course, the Great Recession? After all, members of this group are starting their careers in a market still shaken by those financial crises and will likely be dealing with the after-effects for many years.

As the report notes, “Millennials are currently about a third of the labor force and … they have faced substantial challenges in entering the workforce during the most pronounced downturn since the Great Recession.” The Great Recession had a negative impact on many Americans’ ability to save and invest, including the millennial crowd. Many are living with parents to save money.

It’s time for this generation to get a foothold at the savings starting line and put their retirement goals in front of them. And, as a large portion of today’s workforce, they will be shaping the economy in decades to come.

Millennials lag behind in the retirement savings race

The bad news:

An Indexed Annuity Leadership Council (IALC) retirement data survey revealed that 37 percent of millennials have no money saved for retirement and that nearly a quarter of this group owes more money than they have. For some of them, they are probably not putting retirement on their savings radar since it is so far away and therefore, not a priority. Others are facing student debt or have other life expenses to consider (paying high rent or saving for a new home, for instance).

The good news:

This population has plenty of catchup time ahead of them to build up retirement savings. And you’re never too young to start saving (even college students can start).

The better news:

Opening a self-directed retirement plan, and investing in alternative assets, can be a great way to close that retirement savings gap.

Those tech savvy millennials have lots of resources at their disposal to research all about nontraditional investments, and to find out more about self-direction as a retirement strategy. For those who are comfortable making their own investment decisions, and already know and understand certain alternative asset classes (or have a trusted advisor to turn to), self-direction can give their retirement accounts some much-needed forward momentum.

It doesn’t take much money to open a self-directed retirement plan and with steady, disciplined contributions, that last-place status can move up to a great finish when it’s time to retire. (Slow and steady wins the race, right?)

The professionals at Next Generation Trust Services are here to help millennials, Gen Xers and baby boomers who want to self-direct their retirement plans, with helpful information and guidance; and all the forms you need to open and account or make most transactions are right on our website.

Contact Next Generation with questions about self-direction at (888) 857-8058 or Info@NextGenerationTrust.com … and step up to the starting line in the race to building a healthy retirement nest egg.

In November, President Obama signed a bill that will change the way married couples (as well as certain divorced couples) may have hoped to maximize their Social Security benefits.

The Bipartisan Budget Act of 2015 eliminates the “File and Suspend” option and the “Claim Now, Claim More Later” provision, two tactics people used to employ to increase their monthly benefit. However, people who were planning to take advantage of these strategies do have a narrow window of time to do so.

First, a quick review of these strategies:

File and Suspend

Under this strategy, the higher-earning spouse can file for Social Security at full retirement age (FRA) and delay receipt of benefits until age 70 to earn delayed retirement credits (DRCs). The lower-earning spouse can then file for spousal benefits. Filing and suspending allows the higher-earning spouse’s benefit to continue to grow (and earn delayed retirement credits) while the other spouse claims and collects a spousal benefit. This ends after April 30, 2016, when spouses or other dependents will no longer be able to collect off the suspended benefit (which effectively eliminates any incentive to file and suspend).

Claim Now, Claim More Later

With the “Claim Now, Claim More Later: strategy, the higher-earning spouse reaches full retirement age and files a restricted application for spousal benefits, allowing his or her own benefit to earn DRCs (assuming the lower-earning spouse has already filed). Upon reaching age 70, the higher-earning spouse switches to his or her own benefit, which has grown with delayed retirement credits.

Under the act, if a person is entitled to both a retirement benefit and a spousal benefit at the time of filing, he or she automatically receives the larger amount of the two regardless of his or her age when filing.

People who have turned 62 by the end of 2015 are still eligible to file a restricted application.
Everyone can still delay taking Social Security and increase the benefit by eight percent for every year you don’t take the distribution, between your full retirement age and age 70.

As with anything related to your financial picture and planning for the future, it’s always a smart idea to consult your financial planner or tax professional to see if you should take advantage of either of these (File and Suspend of Claim Now, Claim More Later) while you still can. You can check the Social Security website for some helpful reference materials and information.

Self-Direct and Take Control!

Don’t let changes in Social Security upset your retirement plans. If you know and understand alternative assets, you can include them in your self-directed retirement plan and grow your savings through nontraditional investments. After all, who knows what shape the Social Security Trust Fund will be in by the time you’re ready to retire? But investment property, commodities, precious metals, hedge funds and unsecured loans could be just some of the ways you cushion the Social Security blow, by building a more eclectic (and potentially more lucrative) retirement portfolio.

Check out our website for lots of helpful information … or contact our helpful self-direction professionals with any questions you have about self-directed Traditional, Roth, SEP or SIMPLE IRAs (Info@NextGenerationTrust.com or 888-857-8058). You’ll find all the forms you need under Client Forms; the documents walk you through all the required paperwork to make it easy for you to get started on your new strategy for retirement!

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