Private lending with a self-directed IRA enables you to utilize the business model you know and trust while harnessing a significant degree of control over your retirement. As with almost any investment approach, there are a number of ways to invest in debt with your individual retirement plan.
April 15 marked the due date for our personal tax returns and our last chance to make 2018 IRA contributions. That is, unless you hold a SEP IRA. SEP IRA holders have until their business tax filing deadlines to make contributions into their accounts.
Over-zealous advertising may dangle a “dream retirement” across your screen in the hopes of selling their potentially suspect investment products. You may dismiss such chatter but still wonder if you can retire comfortably without taking a chance on a dubious offering or without implementing some sort of financial genius. Retirement may seem like an intimidating landscape, but self-directed investors continue to unhinge this negative stigma.
A promissory note is a written, signed, and dated contract that establishes the rights and duties of the parties involved in the loan agreement. The loan recipient agrees to pay a certain amount of money either on demand, at a specified time, or in installments to the lender.
You may adjust some or all of your existing pre-tax holdings to a post-tax status by executing a Roth conversion. There are no limitations to the size and scope of allowable conversion activities at this time, so you could combine multiple Traditional IRAs at any value into a single Roth IRA if you're so inclined. You may also convert your assets in-kind, so you wouldn't have to liquidate your holdings before making the switch.
Unrelated business taxable income (UBTI) is operating income that can be earned by a retirement plan. UBTI could include rental income from non-real estate assets (regardless of debt leverage, provided they’re owned directly by the plan) or earnings yielded through an investment in a pass-through entity.
Curiosity surrounding precious metals IRAs continues to rise and more investors are beginning to incorporate physical assets into their retirement portfolios. Learn more about adding physical gold, silver, platinum, or palladium to your self-directed retirement portfolio.
We’ve entered the home stretch of the 2018 tax year. In light of the upcoming tax filing deadline on April 15, there are a few matters worth bearing in mind over these next couple of weeks.
Self-directed investors have a wide range of retirement account options, but by far most prevalent are Traditional IRAs or Roth IRAs. Both feature the same annual contribution limit (as of 2019) and both allow alternative IRA investments like real estate and precious metals, so what’s the difference?
A company may file for an initial public offering (IPO) when they want to issue stock on open markets in the hopes of generating new enthusiasm from eager investors. These same companies could execute another cash-seeking maneuver by launching a pre-IPO, in which additional investors (usually insiders or institutions) can acquire private shares that will ideally appreciate in value once the IPO goes live.
The period between January 1 and the tax filing deadline (April 15) presents a unique opportunity to make IRA contributions for multiple tax years. Contributions for a given tax year are allowed from the beginning of the calendar year until tax day the following year, giving self-directed investors approximately 15 ½ months to contribute for said year.
Building your retirement doesn’t necessarily mean having to invest in a mega-corporation that doesn’t align with your beliefs. While tailored ETFs or mutual funds allow investors to target a particular market segment or industry, alternative IRA investments afford the unique opportunity to invest directly into socially conscious projects for those who are so inclined.
Self-directed IRA investing can help make tax season a little more “fun” (did you get a nice tax deduction from your Traditional IRA contributions?), but your account may carry certain responsibilities depending on your IRA-owned alternative assets. Specifically, your IRA may have to pay unrelated business income tax (UBIT) if it earned money through investments in an operating business or debt-leveraged property.
As with other self-directed retirement plans, you have multiple options for adding funds to your health savings account (HSA). You could make HSA contributions or transfer funds from another HSA, but you can also utilize a little-known option once during your lifetime - Roll funds from an IRA or 401(k) into your HSA.
It’s the time of year when taxes are on our minds, and we may still be putting the finishing touches on 2018. To this effect, remember that your 2018 account statements are now available online.
A lot of money and sensitive information changes hands during tax season, which can bring scammers out of the woodwork to try and maliciously seize identities or refund checks. Fortunately, the IRS is well aware of the heightened risks during the weeks leading up to tax day and wants to help responsible taxpayers keep their eyes peeled for potential threats.
The end of 2018 saw its share of uncertainty from a political and economic standpoint. A key carryover into the New Year was the partial government shutdown, which began on December 22 and extended into a record-breaking, weeks-long affair. One’s inability to confidently operate financially under such circumstances can create frustration, but it is always important to consider ways of adjusting to challenging times.
According to the Center for Retirement Research at Boston College, Americans age 65 and older are still paying, on average and after Medicare, thousands of dollars on medical expenses every year. It may behoove us to remember these expenses as we manage our self-directed investments and plan for our futures. An HSA can be a valuable tool in doing so.
We posted a blog a short while ago about a hypothetical investor who rolled funds from an old 401(k) and purchased real estate with a Traditional IRA. Every stage of the investor’s life provided new opportunities and considerations for adjusting the investment or taking distributions. Let’s review a similar scenario in which our intrepid self-directed investor opens a Roth IRA for private equity investments.
A self-directed 401(k) puts you in the driver’s seat for any investment activities you want to pursue. With a self-directed 401(k), you may transfer, roll, and invest as you see fit as long as your plan document is written to allow alternative assets.
As we carry on into the New Year, our 15th year in business has felt like a new beginning. In 2018 we proudly announced that we became New Direction Trust Company (NDTCO). As a fully chartered trust company, we are empowered to bring our services to the next level and position ourselves for accelerated growth in 2019 and beyond.
The beauty of self-directed IRA investing lies in the powerful combinations of strategies you can implement. From the various account types to your broad range of alternative investment options, you have ample opportunities to meet your retirement goals while operating within your risk tolerance.
Self-employed individuals may be curious about their retirement options, and, as with any self-directed investor, may want to put an alternative investment strategy to work for their futures instead of relying on Wall Street. Although every retirement investor may work toward different goals, a SEP IRA can be a suitable self-employed IRA option for those looking for flexibility and higher contribution limits.
You may already be aware of the tax and contribution benefits that separate health savings accounts (HSAs) from other self-directed savings vehicles, but are you making the most of those benefits?
Investing in private equity with a self-directed IRA affords the unique potential for profit when the company in which your account is invested elects to go public via initial public offering (IPO). Once made available on the public markets, the stock may climb as Wall Street traders seek to capitalize on the freshly available investment opportunity.
The legal production of industrial hemp has transcended individual state legislation to become allowable at the national level. As a result of this recent development, New Direction Trust Company is proud to begin accepting industrial hemp-based positions as investments in self-directed IRAs, 401(k)s, and health savings accounts.
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If you have a Traditional IRA, you’ve likely heard that you’ll one day be responsible for required minimum distributions (if you’re not already). To eventually collect the taxes you’ve deferred over the years, the IRS mandates partial distributions from your pre-tax IRA once you reach age 70 ½.
In a reboot of our Lunch & Learn series, our resident craft-smiths Suzy, Leslie-Anna, and Cynthia taught us how to make decorative ornaments for the holiday season.
There are many “subcategories” in the real estate field—long-term rental properties, fix & flips, land speculation, etc.—all of which your self-directed IRA can hold. Real estate options are other seldom-addressed but viable possibilities for retirement investors.
Real estate IRAs offer the potentially lucrative marriage between a tried and true investment strategy and the tax benefits of a self-directed IRA. Supplementing an investment with debt may seem counterproductive, but an approach backed by due diligence can still prove fruitful.
Self-directed investors who own small companies (ten employees or less) often compare the benefits of a Solo 401(k) with those of a SEP IRA. Both plans offer a distinct suite of benefits that can promote the retirement success of self-employed investors.
The end of the year can be hectic with gifts to buy, parties to plan, and considerations for your self-directed retirement account. You may think you have more on your plate than you actually do, so let’s review some end-of-year circumstances that you may need to address and others that can wait until 2019.
When navigating the world of self-directed investing, one of the most important things to understand are the rules governing how you may fund your account. Overfunding your account can get you in trouble with the IRS and incur tax penalties. Underfunding your account can result in missed opportunities and overlooked tax advantages.
Tax-advantaged individual retirement plans offer opportunities for long-term financial success, so it’s beneficial to know the full scope of potential taxation within your IRA or 401(k). In many cases, taxes won’t apply unless distributed cash or assets are included with annual income, but there’s an occasional misconception that distributions are the only taxable events inherent to self-directed retirement.
It’s the holiday season, which means it’s also the spending season. Savvy consumers may tap two of the year’s biggest shopping days—Black Friday and Cyber Monday—to garner the best possible deals as they tackle the wish lists of their friends and families. Self-directed investors like you can reflect on this season and take the opportunity to consider how you might be able to save money with your IRA activities.
As the Client Relations Manager, my responsibilities are heavily focused on providing our clients with an exceptional experience. I feel my experience and knowledge base prior to working here has given me the ability to see the big picture, both for our clients and for the company.
It's never too early to start thinking about the fair market valuation of assets in your self-directed IRAs, especially as the end of 2018 approaches and our attention diverts toward winter weather and holiday festivities. Fair market valuations, or FMVs, contribute valuable information that assists New Direction Trust Company in maintaining the most accurate possible record for your alternative IRA investments.
Technology is helping to remove the barriers between individuals and their desired investments. A key example to this effect has been the rise of equity crowdfunding, which has granted easy access to start-up companies in need of capital from the comfort of one's own computer.
The IRS recently published important information for self-directed retirement account holders. Depending on your account type, you may have the opportunity to make higher contributions in 2019.
Thriving local economies and population influxes mean new people and new money continue to flow into growing markets, sparking a need for additional housing. Investors can help meet this rising demand and earn tax-advantaged rental income with their self-directed retirement plans.
It’s trick-or-treat season, when costumed youngsters fatten their pillowcases and plastic pumpkin pails with as many sugary favors as they can get their hands on. Stock investors have fattened their portfolios with treats since the end of the financial crisis in the late 2000s, but 2018 had a few tricks up its sleeve.
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From the mid-to-late 2000s, a toxic slurry of factors sent the American economy into a tailspin. Retirement accounts invested in the major stock indices—or the stock market in general—endured the bumpy ride through what we now remember as the Great Recession.
In the midst of a nine-year bull run following the financial crisis of the late 2000s, the major stock market indices have repeatedly oscillated between all-time highs and sharp corrections in 2018.
In the unfortunate event that an asset in your self-directed IRA has become uncollectible, unredeemable, or has otherwise been determined to no longer carry value, there are several important steps you can take to mitigate the overall effects.
You may notice a high-deductible option among your provider's suite of products and wonder why anyone would choose to pay more out of pocket before benefiting from insurance. High-deductible health plan participants typically pay lower premiums, but they're also the only ones who may contribute to a health savings account.
The flexibility and freedom of self-directed retirement comes with inherent responsibilities for all parties. IRA custodians like New Direction Trust Company are required to report the value of your retirement plan to the IRS on an annual basis.
Rick’s story began well before he learned about self-directed IRAs. He had invested in property in Hawaii and Las Vegas, until the turn of the millennium when he directed his attention to publicly traded equities. 10 years later, Rick and his fellow Wall Street investors endured the brutal economic downturn of 2008-2009. Rick decided it was time to re-adopt the tried and true investment approach from his past.
Value fluctuations are a reality for any asset class. Price movements in alternative investments can impact your self-directed IRA and may catch your attention, so let’s examine the possible ways that you, as a retirement investor, could address the ebb and flow of the broader markets that may translate to your account’s holdings.
It’s hard to believe that we’re entering the home stretch of 2018. We’ve already accomplished a great deal this year, but there’s still plenty to take care of before we turn the calendar.
NDTCO provides services that give people control and flexibility in their own financial decisions, which I am very proud to be a part of.
Nearly one year after issuing their non-proof counterparts for the first time ever, the United States Mint introduced a limited number of Palladium American Eagle proof coins for public purchase on September 6.
Earlier this week, we proudly announced the acquisition of our trust charter to become New Direction Trust Company, a Kansas-regulated non-depository trust company based in Overland Park, Kansas with administrative offices in Louisville, Colorado. We’re taking our 15-year background as a self-directed IRA provider to the next level by expanding our operations for the overall benefit of our clients, all while maintaining the industry-leading standards of customer service and education that brought us this far.
As written in the Internal Revenue Code, self-directed IRA holders who defer taxes on their contributions must begin repayment of those taxes once they reach a certain age. Accordingly, clients who meet the following criteria will be subject to RMDs.