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Getting on Track to Hit a Million

Getting on Track to Hit a Million

No, we’re not taking about the lottery here. We’re talking about retirement savings. Many millennials believe they won’t hit a million dollars in savings by retirement. In fact, a study done by Wells Fargo showed that 64% of millennials surveyed think they will not hit that million dollar mark. About 41% of millennials have not started to save for retirement yet because they are either paying off their debt, or feel they do not make enough money to get started. A whopping 34% of millennials have an average debt balance of $19,978 and many of them are finding this debt to be holding them back from saving as much as they would like to.

Many millennials have a very realistic approach when it comes to their retirement. About 66% believe that retirees should be responsible for their own financial support, and roughly 75% believe that Social Security will not be around when the time comes for them to retire (You can read more about that here).  Millennials understand the importance of taking advantage of their employer-provided 401k plans, but too few millennial employees actually have them – roughly 52%.

It’s easy to see why many millennials might feel discouraged about their future retirement. More than half of millennials (52%) are nervous about investing because of the volatility they have witnessed within the stock market. This Harris Poll from March of 2016 explains how 79% of millennials are not investing in stocks because of this fear of volatility. With half of millennials nervous about stocks, and over three quarters of millennials not investing in stocks at all, how can they get on track to hit a million in retirement savings?

The Mark: How to Hit it

According to Wells Fargo, many millennials could be on their way to hitting the million dollar mark by retirement without even knowing it. The median salary for millennials is $27,900 and about 44% are putting away more than 5% of their income for retirement.
There are many options available to millennials who wish to start their retirement nest egg. A popular option is a Roth IRA. These allow your contributions and investment earnings to grow tax free, as you have already paid taxes on the funds that have entered the account. Another bonus of having a Roth IRA is when you take the money out of that account while in retirement  you don’t have to pay taxes on it. If you’re interested in opening a Roth IRA, here is how easy it is.istock_000011781243large
Once you open a self-directed IRA, you can invest as little or as much as you would like into a multitude of investment types. You can read more about that here and here.

Need some education about self-direction as a retirement strategy? Our website has load of helpful information to get you started and in the know, and the helpful professionals at Next Generation Trust Services will answer your questions and handle your transactions with expertise and efficiency. Contact our office at or 888.857.8058.

Want to know more? Check out this link or watch our informative videos. You can also download our free white paper that gives you the inside scoop on how to use self-direction to build your retirement nest egg, using nontraditional investments you already know and understand.

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Retirement on a Budget

Many millennials feel the pressure of student loans bearing down upon them and it can be terrifying trying to figure out how to get rid of all of that debt. On top of worrying about your current financials, you have everyone under the sun telling you to plan for your retirement. You’re probably thinking, “With WHAT money!? How can I get out of debt while saving for retirement at the same time?”. It can seem overwhelming. That’s where Self-Directed IRAs can come in handy for you.

The Basics: Traditional and Roth IRAs

An IRA is an Individual Retirement Account. These accounts are provided by an assortment of financial institutions and they are tax advantaged. There are a few different types, but for now we’ll stick with the basic two: Traditional IRAs and Roth IRAs. Traditional IRAs are tax deferred accounts. What this means is that in addition to the tax deduction you receive for contributing to your IRA, your earnings within the IRA (interest and gains) are also deferred until you distribute. When you withdraw money from your IRA, it is taxed as ordinary income. Roth IRAs are a bit different. There are contribution limits for Roth IRAs and the contributions you make are not deductible. The big draw for a Roth IRA is if you meet certain requirements when you take money out, it is tax free.

The Beauty of Self-Directing

With an IRA you can invest in things like stocks and bonds. With a self-directed IRA, your options become a little broader. Are you well versed in real estate? You can invest in that. Do you like the security of precious metal investments? Invest away! Maybe you’d like to invest in a business? No problem!  With self-direction you can pick something that you are familiar with and invest to your hearts content.  When you self-direct, you are in the driver’s seat. You can invest in ways that other IRAs and 401ks can’t.

Having a wider array of investment options isn’t the only bonus of self-directing your IRA. It may seem like you need a lot of money to start investing. The truth is you can start with whatever you feel comfortable with. Once you begin investing, you’ll gain the experience you’ll need to feel more comfortable with your decisions and invest more. Investing your money can seem scary at first. You can go your own pace and stick with what you feel most comfortable with.

If you would like to learn more about self-direction, contact us here at Next Generation Trust Services. We would be more than happy to answer any questions you might have. You can reach us at or 888.857.8058.

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Why a Self-Directed Roth IRA Might Be Right for You


There are some misconceptions about Roth IRAs that may cause some investors to shy away from them but these retirement plans have some positive attributes to consider.

1 – Tax-free distributions.

Your contributions are taxed when they go into the plan and are distributed tax free.

2 – Unlike Traditional IRAs,

you can continue to contribute (if you meet all other requirements) after you reach age 70 ½. For people with self-directed retirement plans, this is excellent news since you may continue to build up your alternative assets within the Roth IRA for as long as you wish.

3 – No required minimum distributions during your lifetime.

If you’ve built up enough of a nest egg otherwise and don’t need to pull from your self-directed Roth IRA, all the better!

4 – Higher-income earner can derive benefit from a Roth IRA.

The income limits for 2015 Roth IRA contributions begin at $116,000 for an individual and $183,000 for couples; the income cap for conversions was removed in 2010 so that anyone can convert a Traditional IRA to a Roth IRA.
(We recommend you discuss a conversion strategy with your tax professional or financial adviser to make sure you are getting the most benefit out of a conversion from a Tradition to a Roth IRA. There will be a tax hit at the time of the conversion but depending on how long an investment road you have ahead, it could be offset by savings down the road.)

5 – Roth IRA conversions are reversible.

If you suspect you will be in a lower tax bracket when you retire, or you want to pay taxes on those funds later rather than sooner, you can “re-characterize” your Roth IRA conversion by October 15 of the following tax year without penalty. Talk to your financial adviser about this if you feel this situation applies to you.

As always, we invite you to talk about your self-directed Roth IRA with our professionals at Next Generation Trust Services. We offer guidance and support for individuals who are self-directing their retirement plans—be they Traditional or Roth IRAs, SIMPLE or SEP IRAs and other plans. We ensure that you are complying with IRS guidelines regarding alternative assets allowed within these plans and provide all the necessary transaction support and reporting.

Get started on controlling your future today — download our informative white paper, then contact us to get started (with the self-directed IRA of your choice) at or (888) 857-8058.

IRA worth millions a tax problem?

Jaime Raskulinecz, CEO and founder of Next Generation Trust Services was featured in the following article by Sheyna Steiner on

If you put $5,500 in an IRA every year beginning this year and earn 6 percent returns on average, it would take roughly 42 years for your account to grow to $1 million.

Yet, a very small percentage of the population has the opportunity to grow their IRAs to gargantuan proportions. Startup founders, for instance, may get the chance to put nonpublicly traded shares of their burgeoning business into a retirement account before the company goes public. If the company takes off, the price of the shares could balloon from fractions of a penny to millions of dollars.

If that IRA account happens to be a Roth IRA, it’s like winning the tax-free lottery since only contributions to a Roth, not earnings, are subject to tax. If it’s a traditional IRA, Uncle Sam will get his due, eventually.

That may be cold comfort for the taxman. In November, the Government Accountability Office released a report suggesting steps Congress can take to close up the loophole, but not everyone thinks it needs to be fixed.

“There are going to be cases that are extreme, but it’s an honest system and encourages saving and personal responsibly. I don’t think that is something they would want to tamper with,” says E. Brian Finkelstein, a partner at Broad Financial, a provider of self-directed IRAs and solo 401(k)s.
GAO and the giant IRA

The GAO’s report broke down the landscape of IRA ownership and told how a few people came by their vast IRA fortunes.

A handful of people have amassed more money than would be possible from prudent savings and wise investing. Instead, startup founders and private equity executives were able to build their balances by putting nonpublicly traded securities with very low valuations into their retirement accounts.

“The investments are priced low because they are illiquid and there is no guarantee that they will have any value in the future. However, one would not go through all this trouble (of opening a self-directed IRA) if they did not anticipate rapid growth,” says Stuart Caplan, director of portfolio management at Apex Financial Advisors in Yardley, Pennsylvania.

Why the GAO is concerned

The GAO is concerned that a few people are using IRAs in a way that was not intended by Congress and that the IRS could be losing out on millions in tax revenue.

“There are a lot of assets being held in the accounts, and the government wants to track it better so that when people are taking distributions of not cash — assets — they can be more sure that the assets are being valued correctly,” says Jaime Raskulinecz, CEO and founder of Next Generation Trust Services, a provider of self-directed retirement account services in Roseland, New Jersey.

For instance, if you own a racehorse through your IRA and decide you would like to take a distribution from the account in the form of one equine, the IRS wants to know how much that horse is worth to better calculate taxes owed.

“A number of industry stakeholders we interviewed expressed concerns that individuals who invest in nonpublicly traded shares … using IRAs and (defined contribution) plans may undervalue these assets, thus substantially increasing their tax benefits,” the GAO report stated.

Investigating valuation issues requires hiring outside experts and attorneys, and that gets expensive. Taxpayers foot the bill, and the IRS has only three years to detect and go after improper valuations.

IRS collecting new information

The IRS will be asking for the following data from custodians, the financial institutions that hold IRAs. For the 2014 tax year, with returns due in April 2015, reporting the information will be optional; for 2015, it’s a requirement.

New data requested on Form 5498:

  • How much of the IRA’s value is attributed to nonmarket assets.
  • The type of nonmarket assets.

New data requested on Form 1099-R:

  • Identifies distributions of IRA assets that do not have a readily available fair market value.

Other GAO recommendations

Questions about valuations often don’t arise for many years. The GAO recommended expanding the three-year statute of limitations on IRA violations. The report also suggested that a warning be added in Publication 590 about the risks of prohibited transactions and fudged valuations in retirement accounts.

A section of the report directed at Congress proposed some changes to IRAs that could include:

  • Limiting the types of assets permitted in IRAs. It’s not just shares of startups that populate self-directed IRAs. Self-directed IRAs can invest in real estate, timberlands, racehorses, Broadway shows, cattle, precious metals and even interests in oil wells.
  • Requiring a minimum valuation for an asset purchased by an IRA. Founders of startups and their employees may get nonpublicly traded shares valued at less than $0.01.
  • Putting a cap on the amount of money that can be accumulated in IRAs. Congress could require an immediate distribution of balances above the ceiling, the report suggested.

Alternative assets and you

Technically, anyone can invest in alternative assets in an IRA, but they have to first find a custodian who will be willing and able to hold the account. It’s a good idea to deal with experienced firms because a misstep could cause your IRA to become just an A — with all the associated taxes and penalties.

“Clients come to invest in, among other things, real estate assets — maybe they buy a condo on the beach in Florida or the Carolinas and rent it. The IRA will hold it and all rent and expenses flow through the IRA,” says Raskulinecz.

“There has also been a big increase in clients that are making equity investments in startups or loans that may turn into equity investments if the startup gets a big infusion of capital or is sold,” she says.



Retirement Savings: What’s Hot, What’s Not

Americans are saving for retirement in a new way. They have thrown out the traditional three-legged stool (Social Security, employer-sponsored pension plans, and private savings) and replaced it with a pyramid.

According to the Investment Company Institute, the five basic components of the retirement pyramid are: Social Security, home ownership, employer-sponsored retirement plans (both private-sector employer and government employer plans, as well as defined-benefit and defined-contribution plans), IRAs, and other assets.

But, the reality, as reported by the Boston College Center for Retirement Research, is that it is a shaky pyramid. In fact, working-age households are not saving enough to maintain their current standard of living when they retire. With Social Security, Medicare, and underfunded federal and municipal pensions representing the biggest risks for future retirees, Americans need to plan ahead so they won’t get left behind.

Being prepared to supplement Social Security with a robust retirement savings plan is key. In fact, workers should anticipate getting between one-quarter to one-half of their retirement income from retirement savings plans, such as 401(k)s. However, in order to generate this level of income, the typical household must save about 15 percent of earnings—which is well above today’s actual saving rates.

What’s Hot?

What’s trending in retirement savings? According to a recent Fidelity Investments report, retirement savings trends include:

Are you up to date on the latest retirement investment tools? Or, are you like many people faced with the thought of retirement—unprepared?

What’s Not Hot?

Being unprepared is not hot. Retirement should be a time in your life where you can relax and enjoy the fruits of your hard work. But, unfortunately, many retirees are not financially ready to retire.

TIAA-Cref’s Ready-to-Retire Survey  asked retirees what they wished they had done to better prepare for their retirement. Here’s what they reported:

A self-directed retirement account should be on everyone’s wish list as a great way to boost retirement savings through alternative assets. Savvy investors who already know and understand nontraditional investments can develop a more diversified, tax-advantaged portfolio than in regular IRAs or 401(k) plans. Self-directing retirement investments allows for a broader array of assets.

For more information about self-direction as a retirement strategy, or to open a new self-directed IRA, contact Next Generation at (888) 857-8058 or, or click here to read through our Starter Kits.

New Year, New Retirement Savings Strategy

Many people make New Year’s resolutions that seem practical. This is the year I will (fill in the blank):

One resolution that you should put at the top of your list is saving for your retirement.
Like any New Year’s resolution, it is all about starting early. According to Alicia Munnell, director of the Center for Retirement Research at Boston College and co-author of “Falling Short: The Coming Retirement Crisis and What to Do About It,” the golden age of retirement is over. Munnell and her co-authors assert that retirement security in the 21st century is challenged by increasing life expectancy and high health care costs. Therefore, Americans must adjust their practices and expectations.

Make Your Resolution Stick

Here are some easy ways you can stick to your resolution and ensure that your golden years are truly golden:

Freedom of Choice

Investors who want to have a stable and secure retirement know that a self-directed IRA can be a great way to build retirement wealth more aggressively. With a self-directed retirement plan, informed investors have the ability to develop a diversified portfolio that they control, with both traditional and nontraditional assets they know and understand. If you are already investing in these alternative assets outside of your existing retirement plan, why not resolve to build a potentially more lucrative nest egg through self-direction? It’s easy to get started with a call to Next Generation Trust Services.

As a self-directed IRA administrator, we handle all the details of the transactions and manage all the paperwork and filing. Our professionals are available to answer questions about self-directed retirement plans and our transaction specialists ensure you are investing within IRS guidelines.

Contact Next Generation at (888) 857-8058 or to learn how to open a new self-directed retirement plan in the New Year.

Or, read through our Starter Kits for more information. 

Click here for more information about self-directed IRAs.

Making the New IRS Ruling Work for You

If you have maxed out your 401 (k), have no fear, now there is a new way to make after-tax deposits or rollovers to a Roth IRA.

A recent IRS ruling allows eligible workers to easily move after-tax contributions from their 401(k) or 403(b) plan to Roth IRAs when they exit their company plan. This new ruling offers those saving for retirement a boost to their ability to transfer funds or roll over to a Roth IRA.

For example, if you have $100,000 in a 401(k) — $75,000 is pretax and $25,000 is after tax—and you take a distribution of these monies, you can take the $25,000 and convert it to a Roth IRA tax free. The $75,000 can be placed in a traditional IRA as a tax-free rollover. (It will eventually be taxed when it comes out.)

Roth Benefits Retirees

As you may know, Roth IRAs offer a great income stream for retirees because contributions are made with after-tax dollars, which enables retirees to withdraw money tax free. With no mandatory distribution requirements (like traditional IRAs), Roth IRAs can continue to grow tax-free even after you turn 70 ½. Also, if you do need to make a withdrawal for a big expense, such as medical bills, that financial move won’t move you into a higher tax bracket.

This makes the IRS ruling particularly good news for those in a high income bracket because it allows these high-income individuals to divert 401(k) assets into a Roth IRA.

Annual limits 2014 2015
The annual limit on pre-tax contributions to 401(k) plans for those over 50 $17,500 and $23,000 (for those 50+) $18,000 and $24,000
Including your pre-tax and post-tax contributions, and pre-tax employer matches, the total amount a worker can save in 401(k) and 403(b) plans $52,000 and $57,500 (for those 50+) $53,000 and $59,000

Roth IRAs are good for people who want to leave money to heirs. It’s the best asset to leave to your loved ones for a number of reasons: inherited Roth IRAs are free of tax and they don’t have a taxable minimum distribution requirement, which means your heirs can let the monies grow tax-free for years. Some rules or exceptions apply so see your tax advisor.

What else do you need to know
to take advantage of the new IRS rule?

At Next Generation, our professionals are available to answer questions about self-directed retirement plans or rollovers, and our transaction specialists ensure you are investing within IRS guidelines. Since we do not give investment advice, we strongly recommend you consult your trusted financial advisors about your investments and any tax implications they have for your unique situation.

Contact us at (888) 857-8058 or, or read through
our Starter Kits for more information.

High-Net-Worth Individuals Can Include Roth IRAs in their Retirement Planning

Because of the income limits placed on Roth IRAs, higher-income individuals typically do not consider including a Roth IRA in their retirement planning. They may be prevented from contributing to a Roth IRA because they make too much money.

However, there are ways to include a Roth IRA in your portfolio, even if your individual or household income thresholds exceed the proscribed limits. Some high-net-worth individuals who wish to fund a self-directed Roth IRA are starting with a Traditional IRA and converting that into a Roth.

With some planning, high-tax-bracket investors can still enjoy the tax advantages of a Roth IRA—and even greater advantages of directing their own investments if they are comfortable doing so with a self-directed Roth IRA. One way to do this is to open a Traditional IRA and make the maximum allowed contributions to that account ($5500 or, if you are 50 or older, $6500); then convert the Traditional IRA into a Roth IRA. You can repeat this process every year and grow the Roth IRA.

There are tax implications around the Roth conversion but there will be tax-free distributions on the other end during retirement. Depending on the amount of assets held in the Traditional IRA, whether or not you plan to take distributions, and how much you are converting now or taking later will affect your tax burden.

Income limits regarding Roth IRAs
In 2014, the ability to contribute to a Roth IRA starts to phase out for married couples with combined income over $181,000 or single investors with an income over $114,000. The ability to contribute is completely blocked for married investors who earn over $191,000 and individuals who earn over $129,000.

Roth IRAs offer some tax advantages. Unlike a Traditional IRA, account holders do not have to begin taking required minimum distributions (RMDs) at age 70½. Therefore, wealthier investors who do not need those funds during their retirement years can do some estate planning around the Roth IRA. And if it is a self-directed Roth, investors can build a more diverse retirement portfolio by including alternative assets such as real estate, commodities, precious metals, private placements and much more.

Depending on your particular tax and financial situation, you may be able to leave the entire balance, and the account’s tax benefits, to your heirs. However, as with all self-directed IRAs, certain restrictions apply regarding disqualified individuals and prohibited transactions, so don’t hesitate to call one of our professionals to ask your questions about self-directed retirement accounts.
We recommend as with all investing that you consult your tax professional about this strategy, and whether or not it makes sense for you and your family. If you have any questions about self-directed IRAs or the types of nontraditional investments allowed in these accounts, contact Next Generation Trust Services at (888) 857-8058 or To open a new account, everything you need is at


Traditional IRA vs. Roth IRA

Uh oh – we’re in the fourth quarter of the calendar year, it will soon be time to send your tax documents to your accountant . . . and you didn’t set up an IRA yet to start saving for retirement?

No worries – you have until April 15, 2014 to make a contribution that will apply to the 2013 tax year. But now—well, any time—is ripe for opening up an IRA, if you don’t have an employer-sponsored retirement plan through work. Whether or not to select a traditional IRA or Roth IRA is the question. There are benefits to each type of retirement plan depending on the investor’s goals and situation. There are also certain restrictions around income, age, and other factors. Either one of these may be self-directed. We always recommend that our client consult their financial planner or tax professional about which type of retirement plan is best for their unique situation.

Traditional IRA 101

The traditional IRA (individual retirement account) was created in 1975 by the federal government for those Americans who did not have pension plans through their employers, and because (even back then), Social Security was not providing enough income during retirement. Sound familiar?

The IRA education page of our website lays out the basic information about traditional IRAs; for example:

• The traditional IRA is an account that is used to save pre-tax dollars for use in retirement.

• The contributions made to this account are tax-deductible.

• The minimum age that account holders are allowed to start withdrawing money is 59½; withdrawals made prior to age 59½ are subject to an early withdrawal penalty in addition to taxes owed.

• Account holders must start withdrawing funds, which are taxed as ordinary income, after reaching the age of 70½.

• Money grows tax free while it is in the account. Taxes are only paid once money is withdrawn.

• You may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan.

• You may set up a traditional IRA and make contributions if you (or, if you file a joint tax return with your spouse) received taxable compensation during the year, and you are under the age of 70½.

 With a self-directed IRA, whether traditional or Roth, SEP or SIMPLE (for employers and the self-employed) individuals may invest in a broad range of assets, not only stocks, bonds and mutual funds but the many alternative investments allowed within a self-directed retirement plan. If you have any questions about these assets or the types of plans that are available, please contact us.

 Roth IRA 101

The Roth IRA was created in 1997 due to the Taxpayer Relief Act. A big difference (there are a few) is that the funds you contribute to this type of retirement account are already taxed, so the money generated by the investments in a Roth IRA is withdrawn tax-free.

A Roth IRA is similar to a savings account. Money is invested to generate a sizeable profit. The profit you make will then be reinvested into a Roth IRA until the maturity date hits. A Roth IRA allows a person to withdraw funds tax-free and you aren’t required to ever withdraw the funds. The reason the money is tax-free is because the money is invested after you pay your taxes.

Here is some basic knowledge that you need to know about a Roth IRA which was covered in a previous blog post.

 Basic Information About a Roth IRA:

• When money is taken out of the Roth IRA, however, funds up to the amount put into it are always federal-tax free, and often the entirety of the funds are free from federal taxes.

• Intended for the middle class to help save for retirement. The basic uses include: purchasing a primary residence, medical expenses, and help fund a child’s college education.

• No penalties if you withdraw after a 5-year waiting period.

• Money invested is already taxed so any return you earn won’t be taxed if you wait to withdraw until you are 59½.

• No required age to withdraw from the account, and your beneficiary can inherit the account.

There are also restrictions towards a Roth IRA. When this was setup it was intended to help the middle-class. Therefore a single person who makes a gross income of $110,000 or more, and a married couple who earns an income of $160,000 or more is not eligible to contribute to a Roth IRA.

There are advantages and disadvantages to both types of IRAs. Now that you are educated about what a Traditional IRA and Roth IRA are we hope that you decide which one would be more beneficial to you when planning for your retirement. If you have any questions please don’t hesitate to contact one of our representatives at (888) 857-8058 or email us at

For further information about Traditional IRAs and Roth IRAs please read up on information at