Living off the land: Self-Directed Real Estate IRAs

, you can invest in real property to fund your retirement.

A self-directed IRA is one in which the individual account holder makes all his or her own investment decisions, in order to direct the types of investments made within the retirement plan—real estate being just one, but a very popular type of alternative asset. In fact, in a recent article on Hedgeweek.com, the results of a Morgan Stanley Wealth Management Investor Pulse Poll revealed that the majority of millionaire investors cite real estate as the most popular alternative asset class. 77 percent of millionaire investors polled say they own real estate while 35 percent say they own a real estate investment trust (REIT).

Nontraditional investments have reached record levels in the past few years with growth expected to continue. That, coupled with very attractive real estate prices in most markets, makes real estate a good alternative to traditional IRA investments. As with any investment, know your market, and understand how this investment can work for you within a self-directed real estate IRA. You can watch our helpful video about how to invest in real estate through your self-directed IRA here.

Some things to keep in mind:

• In order for investors to get the tax benefits of a self-directed Traditional IRA or Roth IRA, investors are prohibited from buying an investment from or selling an investment to a disqualified person. This would include spouses, parents, themselves as the owner of the IRA, etc. For example, funds from your self-directed IRA can’t be used to buy a rental property for your own personal use.
• The real estate must be held by a custodian. Therefore, the legal title of the property must be in the name of the IRA.
• All income and expenses related to the real estate in the IRA have to flow through that same IRA.
• All income from the real estate is tax-deferred or tax-free with a Roth IRA. That includes rental income and capital gains. If you plan to be in a lower tax bracket at retirement, this is quite favorable. You can also make tax-deductible contributions to the self-directed IRA.
• There are also tax implications if a self-directed IRA account holder makes an investment and there is debt associated with it—for example,  if you buy a rental property and then  the IRA takes a mortgage on it, some of the investment income could be taxable. This can be a complicated topic; for more information, contact your tax advisor or the Next Generation office.

Once you understand the rules, funding and investing through a self-directed real estate IRA can be a great way to build retirement wealth. However, it helps to have an experienced professional by your side. At Next Generation Trust Services, our professionals are available to answer questions about self-directed retirement plans and our transaction specialists ensure you are investing within IRS guidelines. We strongly recommend you consult your trusted financial advisors about your investments and any tax implications they have for your unique situation.

For more information about self-direction as a retirement strategy, or to open a new self-directed IRA and invest in real estate through your IRA, contact Next Generation at (888) 857-8058 or read through our Starter Kits at https://www.nextgenerationtrust.com/open-an-account/.

Going For the Gold Investment

Team USA is expected to come home from Sochi with the most medals, with Norway favored to win the most gold at the 2014 Winter Olympics. For investors who aren’t competing in Sochi, they can go for the gold by investing in gold or other precious metals through a self-directed retirement plan.

The purchase of bullion is a relatively safe investment and one that goes back further than the Olympics. (Precious metals are the original way that people stored their wealth.) And, there are numerous benefits to investing in precious metals, an important one being that the value of precious metals provides a strong hedge against the rising costs of retirement living.

Why invest in precious metals?

All types retirement plans can be self-directed (Traditional, Roth, SEP, SIMPLE, 401K), with the same tax advantages associated with those types of accounts; all can include the following precious metal assets:

• Investment-grade gold and silver coins (certain IRS restrictions apply)
• Investment-grade gold and silver bars
• Gold, silver, platinum and palladium bullion that meet applicable purity or fineness standards.

Account holders may choose to hold precious metals in a self-directed IRA as physical bullion, certificates, or Exchange Traded Funds. The hard assets (bullion, bars and coins) are held off-site in a depository (not in the investor’s possession) that specializes in holding precious metals.

Some advantages of building a self-directed precious metal IRA are:

• Buy and sell orders can be executed quickly, ensuring that the investor can take advantage of the variables of timing and pricing.
• Monies grow tax free or tax deferred, depending on the type of retirement plan.
• Investments are not dependent on the stock market or subject to its unpredictability.
• Gold is a tangible asset with worldwide demand and prices that have been trending upwards for years.
• Silver remains relatively affordable and provides a comfortable point of entry for investors, with room to grow in value.
• Palladium is rare and therefore a high-priced commodity.

 Precious metal IRA – including this alternative asset in your self-directed IRA

Investing in alternative assets such as precious metals is a powerful way to diversify a retirement portfolio.  A self-directed precious metal IRA requires an administrator, such as Next Generation Trust Services, to set up the account, handle the transfer of funds to the precious metals dealer, and facilitate the physical transfer and storage of the coins or bullion.

As with all self-directed investments, the investor is responsible for doing the proper research about this type of nontraditional retirement investment before sending instructions to the account administrator. In addition, it is the investor’s responsibility to secure a depository for precious metals, and provide Next Generation Trust Services with the dealer’s contact information and full purchase instructions so that we can implement this transaction for you.

Our knowledgeable professionals can answer your questions about self-direction, including non-publicly traded assets—such as gold, silver, and other commodities—in your self-directed retirement plan. However, we strongly recommend you do your due diligence about this or any self-directed investment, and consult your trusted financial advisors about any tax implications precious metals may have for your unique situation.

Our website has all the materials you need to open a new self-directed precious metal IRA. For more information about self-direction as a retirement strategy, or how to include precious metals in your self-directed retirement plan, contact Next Generation at (888) 857-8058 or email Info@NextGenerationTrust.com.

Next Generation offers free education and guidance to its clients and their trusted advisors about the many options and benefits of self-direction as a retirement wealth-building strategy. For more information about self–directed retirement plans or for questions about including precious metals in such an account, contact Next Generation Trust Services at Info(at)NextGenerationTrust(dot)com or (888) 873-8058, or visit https://www.NextGenerationTrust.com.

No Investment Plan? Not a Good Idea!

highlighted results of a small study done by Nationwide Funds. Nationwide polled 783 potential investors who have a minimum of $100,000 in investible assets—no chump change there. The responses revealed a startling matter: one fourth of potential investors don’t have a financial plan and almost half of that group (40 percent) doesn’t plan on developing one.

They’re just not into it. Some feel retirement is too far away to think about, others are getting their financial information elsewhere.

This is not wise. If you are in this situation, get thee to a financial professional!

In today’s volatile world, where Social Security is no longer a given and lifelong employment is not always available to everyone, people need to take control of their finances, work out a sound plan that meets their needs and goals . . .  and open a retirement account to start investing for their futures. It is not going to happen by itself.

There is some good news about investors and savings. Overall savings rates have increased in the post-crisis years among investors, as more people have endured big downturns in their accounts’ balances, and are concerned about paying for their future health care, children’s education, and their retirement lifestyle. Although many Americans are still skittish about market volatility caused by the country’s lingering economic woes, government shutdown, global political strife, and debt ceiling debates, savvy investors who are knowledgeable about alternative and traditional assets, and want to make their own investment decisions, can open a self-directed retirement account. Through self-direction, they can start building up their retirement savings without all the ups and downs of the stock market because of the broad array of assets these account allow—at any stage of their work life and at any age.

That being said, at Next Generation Trust Services, we believe experts in their fields can provide insights and knowledge that others cannot; financial planners, tax professionals, and other financial advisers can help investors devise an investment road map that makes sense for their income, lifestyle, and current and future needs. So go ahead and make that appointment with a trusted adviser . . . then open a self-directed retirement account at Next Generation. Our staff professionals will answer any questions about self-direction as a retirement strategy, assist with getting a self-directed IRA open, and explain the many options and benefits that self-direction offers.

Click Here to Download a PDF Version of No Investment Plan? Not a Good Idea!

Operations Manager Matthew Zidow, Transaction Specialist Timothy Wilms Will Discuss Real Estate and Other Alternative Assets with Real Estate Professionals

Operations Manager Matthew Zidow, Transaction Specialist Timothy Wilms Will Discuss Real Estate and Other Alternative Assets with Real Estate Professionals

Matthew Zidow and Timothy Wilms of Next Generation Trust Services will be the presenters at the next monthly meeting of the New Jersey Real Estate Social Network (NJRESN) on Wednesday, August 14, 2013. Zidow, the firm’s operations manager, and Wilms, the transaction specialist, will explain self-directed retirement plans and the various types of alternative investments allowed in these plans, including residential and commercial real estate. The event, which is for real estate professionals, investors, and lenders, will take place at The Westwood, 438 North Avenue in Garwood, N.J. Networking begins at 6:00 p.m. and the educational portion of the program begins at 8:05 p.m.

Next Generation Trust Services, based in Roseland, N.J., is a full-service administrator of self-directed retirement plans, which allow for a diverse array of traditional and nontraditional investments. Account holders make all their own investment decisions; the assets are held and accounts managed by a neutral third-party administrator such as Next Generation. In addition to real estate, account holders may invest in precious metals, commodities, hedge funds, loans, mortgages, private placements, and much more to build their retirement wealth. According to Jaime Raskulinecz, Next Generation’s CEO and a noted expert on investing in real estate through an IRA, approximately half of all her clients’ self-directed investments are in real estate.

We are happy to provide educational resources about self-directed IRAs to real estate investment clubs and professionals who are excited to learn about this rapidly growing strategy to build wealth for retirement,” says Jaime Raskulinecz, CEO

The New Jersey Real Estate Social Network meets monthly to network, exchange ideas, and grow members’ businesses through referrals and education. Presenting at the event is part of Next Generation’s commitment to providing guidance and education to consumers and real estate and financial professionals about the many options and benefits of self-direction as a retirement strategy. Next Generation supports several real estate investment associations throughout the New York metropolitan area and is a frequent exhibitor at national and regional conferences and expos geared to those in the real estate, financial, and retirement industries

For complete details about NJRESN’s August meeting or to register, go to https://www.meetup.com/network20/. More information about NJRESN is available by calling (908) 868-2178 or emailing njresn@joshwa.com.

To find out more about self-directed retirement plans or to open a new account, contact Next Generation Trust Services at (973) 533-1880 or Info@NextGenerationTrust.com, or visit https://NextGenerationTrust.com.

About Next Generation Trust

Next Generation Trust Services (NGTS), headquartered in Roseland, New Jersey, is a professional third-party administrator of self-directed retirement plans. NGTS provides education, administrative support, and account maintenance to individuals interested in self-directing their retirement portfolios with a wide variety of investments that are not typically found in an IRA, such as real estate, precious metals, notes and mortgages, private placements, accounts receivables, limited partnerships, hedge funds, and much more. Next Generation Trust Services serves clients globally via its website, https://www.NextGenerationTrust.com. For more information on self-directing a retirement plan, call 973-533-1880, 888-857-8058 (toll free), or e-mail Info@NextGenerationTrust.com.

Ready or Not, Retirement Will Come! Part 2

Hmmm . . . no pensions, a volatile stock market, not enough Social Security income, expensive medical care, a poor return from 401(k)s and other retirement plans that were decimated during the recent financial crisis . . . it doesn’t paint a pretty picture for people facing retirement, especially the huge number of baby boomers. In fact, The Center for Retirement Research at Boston College states that 45% of baby boomers are at risk of not having enough income to maintain their living standards after they retire.

What to do? One way to be more aggressive about your retirement savings is to take control of your retirement account through self-direction. With a self-directed IRA, you, the account holder, make the decisions about what those funds are invested in—and you can select from a diverse array of nontraditional investments normally restricted from other retirement plans. For example, if you are already investing in real estate outside of your IRA, you can choose to do so through a self-directed IRA, and grow your retirement savings that way. How about lending money to friends or relatives, or becoming a silent partner in a start-up business? You can do this with funds from your self-directed retirement account, at terms you determine, which will produce a higher rate of return than any current CD or money market account available today, plus the returns on these investments grow tax-advantaged in your IRA.

While this retirement savings strategy is not for everyone, it is well suited to individuals who are knowledgeable about certain kinds of investments and are comfortable managing those investments themselves. Self direction provides an opportunity to build a more aggressive retirement portfolio and it doesn’t take much to get started. You can open a self-directed retirement account any time, at any age or phase of your work life, and start investing with just a few thousand dollars.

You know your retirement is coming whether or not you are financially ready for it today. A visit to your financial planner will help you develop a strategy for whatever phase of life you are in now and whatever your lifestyle needs dictate. If you are already investing in or knowledgeable about some of the nontraditional investments allowed through a self-directed retirement plan, you might find that instead of feeling like you’re falling behind, you’re ready to take the lead on your retirement savings strategy through self-direction.

Non-Recourse Lenders

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Next Generation Trust Company does not evaluate, recommend, warrant, guarantee, or endorse the legality, propriety, performance, or reliability of any investment, service, statement, opinion, or other representation of any professional listed in our service providers network; carry any liability in any event for any misinformation, misrepresentation, negligence, act, omission, investment results, or wrongdoing of any professional network service provider; have any agreement or arrangement with any professional service provider with regard to any investment or service that may be provided to NGTC account owners or other investors; have any financial arrangement or affiliation with any professional network service provider.

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First Western Federal Savings Bank
(605) 341-1203
South Dakota

At First Western Federal Savings Bank, you’ll find an honesty from our non-recourse lenders that you won’t find anywhere else. We take extraordinary pride in providing simple, straightforward answers to your very important questions about buying investment real estate. As a portfolio lender for over 30 years, every loan we make stays in-house which means the same person works your application from start to finish and throughout the loan’s repayment so you can always know the status of your deal.

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North American Savings Bank
servicing@nasb.com”
(866) 735-6272
Missouri

North American Savings Bank was founded in 1927 on the principles of strength and security. Today, with more than $1 billion in assets, we continue to do what we do best— provide strong, conservative leadership and profitably navigate the ups and downs of the economy, while providing a safe and secure place for your deposits. We are a community bank, staffed with your neighbors and friends, who are committed to providing you with high-quality, professional, hometown service.