NGTS Featured in NJ Biz 2013 Business Profile
Published on July 26, 2013Matthew Zidow, Jaime Raskulinecz, Tim Wilms, DeAnna Vecchio, Linda Varas
Self-directed retirement plans are becoming more popular but many people still ask: What is self-direction and is it for me? Once considered an investment option only for the wealthy, self-directed retirement plans are becoming more popular among the general investing public. Just ask the professionals at Next Generation Trust Services, LLC, a third-party administrator of self-directed retirement plans.
Founded in 2004 by CEO Jaime Raskulinecz, the company educates individuals and their advisers on the many options and benefits of selfdirection, and provides comprehensive account administration and transaction support services to individuals interested in self-directing their retirement portfolios.
Although self-directed retirement plans have been around since the inception of IRAs in the mid-1970s, the strategy has gained much more ground in the 2000s due to the unpredictability of the stock and bond markets. Investors are concerned about relying on their traditional retirement accounts and are looking for ways to take more control of their retirement savings.
“With all the wild fluctuations in the stock market since 2001, more people are looking for ways to get off that investment roller coaster,” says Raskulinecz. “For individuals who want to invest in nontraditional assets through their IRAs, selfdirection could be a great way to build a more lucrative retirement portfolio.”
All types of retirement plans are available as a self-directed account: Traditional and Roth IRAs, Health Savings Accounts, and Coverdell Education Savings Accounts; SIMPLE IRAs and SEP IRAs for employers and the self-employed; and, in some cases, self-directed 401(k) plans.
Alternative Investments = A More Eclectic Portfolio
With self-direction, investors make all their own investment decisions—usually based on investments they already know and understand, and possibly, are already investing in outside of their existing IRA. These include both traditional assets—stocks, bonds and mutual funds—and alternative assets such as: residential and commercial real estate (domestic and foreign), precious metals, hedge funds, commodities, commercial paper, mortgages, unsecured loans and a lot more.
“Many investors—and even their financial advisers—tell me they never realized they could be investing in these assets within their IRAs,” notes Raskulinecz.
Anyone can open a self-directed IRA at any age with a comfortable minimum contribution. Self-directed plans can be opened with new funds, by transferring from an existing IRA, or rolling over funds from an old employer 401(k) or other employer-based plan.
Raskulinecz says some clients have made relatively unusual investments in their self-directed retirement plans to build their retirement nest eggs; the profits realized from these expenses return to the IRA. However, she notes that about 50 percent of self-directed investments are in real estate or are real estate-related investments.
Among her clients’ more unusual investments are:
- Shares in a foreign TV station, Broadway show, race horses.
- Natural gas rights—Next Generation Trust, as the administrator, set up the drilling contract on behalf of the self-directed IRA; proceeds flow into the IRA.
- Personal loans—The self-directed retirement account can lend money to a borrower and reap tax-advantaged rewards as the loan is paid back with interest. Clients’ IRAs have loaned money for college tuition, to clear up credit card debt, to buy business equipment, or as venture capital for a startup company. The IRA account holder and borrower work out the loan terms.
- Overseas condominium—for use as rental property. The self-directed IRA made the purchase and paid for the decorating; rental income goes to the IRA.
A Reputation for Service and Support
Although Next Generation Trust’s clients make all their own investment decisions, the transactions within a self-directed retirement plan are handled start to finish by the account administrator. Next Generation Trust Services holds the assets, expedites the transactions, manages all the paperwork and required IRS filing, and answers questions about the diverse investment options available. The staff also handles all mandatory IRS reporting on the accounts and assets.
The firm’s experienced, knowledgeable professionals never endorse or sell any products or investments, nor give investment advice; however, they do make sure clients are investing in accordance with IRS regulations, and guide clients through their self-directed transactions.
Raskulinecz points out that while these services are what anyone should expect from a self-directed IRA administrator, Next Generation Trust goes several steps further in its customer service.
“We take a real client-centered approach to everything we do to ensure all our clients receive the superior customer service we are known for,” says Raskulinecz.
All employees are cross-trained so they can answer basic questions clients may have, and the company’s website has lots of educational information, links to resources, and timely IRS updates regarding retirement plans on its blog.
The company has also added many user-friendly innovations to its website to make opening accounts and conducting transactions more streamlined.
“Our Welcome Kits, Asset Kits and other downloadable forms, and the ability to pay fees online, are some of the ways we make working together easier for our clients,” says Raskulinecz. In addition, investors may schedule a complimentary oneon- one consultation to learn more about this retirement wealth-building strategy, and determine if it’s right for them.
“It doesn’t matter if you have a thousand dollars or a million to invest. It’s all about taking control of your investments,” says Raskulinecz. “For people who are comfortable building a more diverse retirement account through assets they know and understand, self-direction can be a powerful way to grow their retirement savings.”
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