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self-directed iras

Unlock the Full Potential of Your Retirement Investment with Self-Directed IRAs

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That being said, how are you setting up the solid game plan to ensure the successful path to a secure retirement?

When you’re thinking ahead to retirement, it may be prudent to consider tax planning to be an essential part of your retirement strategy from the beginning, to maximize compounded returns.

There are a wide array of options designed to help grow your investment balances in a tax-advantaged environment.

If you desire greater control over your retirement funds and flexibility of investment options more familiar to you, then a self-directed IRA can be a viable way to boost tax-sheltered benefits.

Join this webinar to learn

➡️ How a self-directed IRA can be created; plus, its linkage and comparisons with other traditional retirement accounts (i.e. 401K, Roth/Traditional IRAs, etc.).

➡️ Investors, learn how to maximize benefits from a self-directed IRA, as well as potential downsides and risks, and tax pitfalls to avoid.

➡️ Allowable, expanded alternative investment options and prohibited ones, along with common real-life examples of other investors

Date: 02/23/2021 – Tuesday at 7:30 PM ES

Hosted by: Adam Levine and Tei Kim (Levine Capital)

Speaker: ADAM BERGMAN

Founder and CEO of IRA Financial Technologies,
a custodian and leading provider on self-directed retirement plans

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A Hidden Wealth-Building Tool Every Investor Should Know About

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If you already have a million dollars set aside for your retirement years – a figure most experts recommend as a goal – you’re not the norm.

According to 2013 data from the Economic Policy Institute (EPI),  individuals living on the cusp of retirement age (in their 50s and 60s) are well behind $1 million in savings. As of five years ago, soon to be retirees are coming in at $124,831 and $163,577 respectively.

A retirement savings crisis

More recently, an annual survey conducted by insurer Northwestern Mutual, found that one in three Americans has less than $5,000 set aside for retirement!

And while the data in Northwestern’s report is impacted by other age groups, the fact is that many Americans are well behind the one million dollar goal for their retirement portfolios.

In fact, a 2017 report from the Government Accountability Office (GAO) discovered that “about half of households age 55 and older have no retirement savings – and up to two-thirds of workers may not have saved enough to maintain their standard of living in retirement.”

Whether or not you’re behind in your retirement savings goals, as a savvy investor, you know why it’s smart to always be on the lookout for a great opportunity to grow your portfolio.

A self-directed IRA (SDIRA) is one such opportunity. And while it’s an investment tool that’s been around a while – since the 70s, actually – the truth is that it’s often “hidden” in plain sight.

Why?

Because banks and brokerage firms are, by and large, the custodians who offer traditional IRAs, which invest in stocks, bonds, mutual funds, etc.

Alternative investments, then, aren’t on their radar so of course, they’re not going to advertise SDIRAs.

Investment choices

While there are many things you can choose to invest in, the following investment choices are among the most common.:

Stock market

Many individuals – perhaps even you – have made a lot of money on the stock market. But not everyone wants to invest in stocks, bonds, futures, commodities, etc.

Fortunately, for these individuals, there are always alternative investment options such as property investing.

Real estate investing

As you know, investing in real estate can be a very satisfying way to build wealth. It’s easy to understand and much of it is entirely within your control.

But, even if you choose to diversify your real estate holdings among a variety of real estate types; commercial, residential, multi-tenant, etc., at the end of the day you’re still investing in one asset class.

Pensions, 401k

Most employers offer some type of retirement funding option…and if it suits your retirement strategy these can be useful ways to build your nest egg.

However, you’re limited on how much you can contribute and you’re not in full control of the investments your plan makes.

Traditional and Roth IRAs, Self-Directed IRAs

With a self-directed IRA, you are in complete control of the investments you choose.  In fact, one of the best things about a self-directed IRA is that you can invest according to what you know and like.

Wine connoisseur?  Great! Your SDIRA can invest in a winery.

Want to lend money to a family member?

You may be able to do that (assuming they’re not a disqualified individual)

And then, of course, there’s real estate.

Following are just some of the types of real estate an IRA can invest in:

  • Raw land
  • Rental income properties
  • Manufactured homes
  • Public storage units
    Trust deeds
  • Secured notes
  • Parking lots, etc.
  • Timber rights
  • Mineral rights
  • Tree farms

Bottom line, with an SDIRA you have TOTAL CONTROL over your investment choices.

A quick overview of prohibited and acceptable transactions and parties when using a self-directed IRA:

  • You can’t buy from yourself or another prohibited person. (think “up and down” your family tree; parents, kids, spouses)
    • You can, however, go “left to right”, so siblings, uncles, aunts, cousins, etc. are not disqualified parties.
  • You can’t use your IRA as collateral for a personal loan.
  • Co-mingling is prohibited (e.g. if your IRA is the owner of record and you start paying for the roof leak, etc. with taxable dollars, the IRS considers it to be commingling your taxable money with your qualified money)
  • As you’re probably aware, expenses and cash flows would have to go through the IRA. Because it’s the owner, all the rent and income flow back into the IRA.
  • Obviously then, the same thing would apply if you had an expense in connection with the property (or other assets).

Self-directed IRA changes for 2019

If you already invest in an SDIRA or plan to, the following changes for self-directed IRAs will happen next year.:

New contribution limits for 2019

  • 2018 – $5,500
  • 2019 – $6,000

Individuals over 50

  • 2018 – $6,500
  • 2019 – $7,000

401(k) employee contributions

2018

  • under 50 – $18,500
  • 50+ – $24,500

2019

  • under 50 – $19,000
  • 50+ – $25,000

SEP IRAs

2018 – $55,000 Max Considered Compensation – $275,000

2019 – $56,000 Max Considered Compensation – $280,000

SIMPLE IRAs

2015-2018

  • Under 50 – $12,500
  • 50+ – $15,500

2019

  • Under 50 – $13,000
  • 50+ – $16,000

As of October 2018, the ability to recharacterize a Roth conversion has ended.

As of March, 2018, there was a reported $9.2 Trillion in IRAs in the U.S. (up from $8.7 trillion).

If you’re looking for an investment option outside of Wall Street, a self-directed IRA is a great investment choice.

Creating your SDIRA

Opening up your own self-directed IRA is easy, but it will require setting it up with a custodian who can handle the administrative work for you to make sure you get the tax breaks you’re eligible for and that the IRS requirements are met.

  1. Open and fund your IRA (using new deposit or move money from an existing IRA or another retirement vehicle)
    1. Fill out an application
    2. Provide proof of your identity (eg. Drivers’ license)
    3. Provide a method of payment
  2. Choose your investment
  3. Purchase the investment through your IRA (note: the asset will not be in your personal name, but will be held in the name of the IRA, for your benefit (your custodian will send the funds from your IRA to purchase the investment)
  4. Manage your investment
  5. Sell the investment – proceeds return to IRA tax-deferred or tax-free and can be used for future investments

Remember…the custodian you use is passive – they don’t give you advice, they’re just a holding entity, that’s all.

When you’re looking for a home for your SDIRA, go with an experienced company like UDirectIRA.

UDirectIRA provides administrative services for investors.

“We help people invest outside the stock market to improve their financial future,” said Kaaren Hall, CEO of UDirectIRA. Investors should know that self-directed IRAs are a great way to invest in asset classes that they understand.

“There is a retirement crisis in America. Ten thousand people are turning 65 every day. In fact, I read one article that said there are more older people than there are children in the world, which is a first time ever, so our population, on the whole, is aging, but people aren’t prepared to retire.

“Even if you have, for example, $100,000 in an IRA account. It seems like a lot of money, but I did the math one time and figured out that if you’re 59 1/2 and you’ve got $100,000, assuming no gain or loss, that means only $396.83 a month if you live till 86.5.  We have to get busy and build our nest eggs so we can have a quality retirement.  $400 a month is not going to cut it for anyone.”

“Know that if you take even, monthly distributions, that’s only going to give you just under $400 dollars a month!

“Everybody needs to retire at some point in time, and most people don’t have enough money saved. It’s a real crisis and we’re trying to help people avoid that through the use of Self-Directed IRAs.  A Self-Directed IRA, invested in asset classes our account holders understand,  means more control over their financial future”.

 

Kaaren Hall

Kaaren has helped hundreds of people self­direct their retirement savings. A native of California, she has a 17­year background in Real Estate, Property Management and Mortgage Lending. She has worked at such companies as Bank of America, Centex Homes, Pulte Homes and Indymac Bank. She’s held a real estate license in Washington, T exas and California and a Life & Health license in California.

Her company , uDirect IRA Services, LLC, offers self­directed education and services to investors, providing excellent customer service. Kaaren is a public speaker and master networker . A mother of two, she lives in Orange County.

 

Retire Wealthy with IRA Investing

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By Stephanie B. Mojica

Self-directed individual retirement accounts or IRAs are rapidly growing in popularity, but experts warn that it is important to only get into such an investment with proper education and professional guidance.

Kaaren Hall, owner of uDirect IRA Services in Orange County, Calif., says even after more than two decades in the financial industry and four years of running her company she too must continually stay on top of her investment education particularly regarding Internal Revenue Service guidelines for retirement accounts.

Self-directed IRAs allow people to invest their retirement funds into a variety of options outside of the traditional stock market, including real estate, land, and private notes.

“Financial literacy is not taught in schools, but our future depends on understanding it,” Hall says. “Only about 4 percent of u.S. investors have a self-directed IRA. Why? Because most investors and many advisors simply aren’t aware of it.”

But even those who are aware of the potential financial power of self directed IRAs often do not fully comprehend is the IRS guidelines of “prohibited transactions,” according to Hall.

“You’re not allowed to have any personal benefit from your IRA prior to retirement,” Hall says.

A common misconception among investors is that they can use the self-directed IRA funds to purchase real estate or other property from themselves or close relatives such as a spouse, a child, a grandchild, a parent, a grandparent and any spouses of such relatives. These transactions are not permitted under self-directed IRAs, according to Hall. However, an investor could purchase property from a more distant relative such as a sibling, a cousin, a niece, or an uncle.

“Make sure you know what you’re doing,” Hall says. “We’re here to help people so they understand the twists and turns as much as possible.”

The term self-directed in itself misleads some people because it is the IRA doing the investing, Hall adds.

“So that’s confusing because they get into trouble by maybe signing a purchase contract (in their own name),” she says. “Your IRA can’t buy an asset that you own.”

Consequently, people should wait until they actually open an account with a qualified custodian before funding it and making transactions, Hall says. Generally, a custodian rather than the actual investor should sign purchase contracts relevant to self-directed IRAs.

While representatives of companies such as uDirect IRA do not give actual investment advice due to potential legal liability, they can help people follow ever-changing IRS guidelines.

Hall, a former mortgage broker whose work history includes Bank of America and Indymac Bank, has educated tens of thousands of investors into deciding whether self-directed IRAs are right for them. She and her associates have directly worked with thousands of clients.

To learn more about self-directed IRAs, call 866-447-6598 or visit www.udirectira.com

How to Earn Tax-Free Wealth on Real Estate Deals and Meet Hundreds of Other Investors

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There is a (legal) way to make tax-advantaged profits on your real estate investments. Equity University’s Wealthy Building Summit was created 6 years ago to reveal those strategies from the successful investors using them and to help investors connect.

Many real estate investors have been surprised to find out that they could pay fewer taxes – or defer tax payments – on profits from their real estate and other investments.

It may not seem possible, but it’s true – and legal. Government sponsored retirement plans such as IRAs and 401(k)s, as well as healthcare and education savings accounts, allow the plan holder to invest in almost anything – including real estate. In addition to all the benefits those plans provide—tax-deductions and tax-free profits—apply to nearly any investment the investor chooses, including real estate.

Reducing Taxes on Real Estate Profits Since 1974

Most investors don’t know this opportunity exists because most custodians of IRAs (and other savings accounts) do not offer truly self-directed IRAs that allow Americans to invest in real estate and other non-traditional investments.

According to industry estimates, only about 2 percent of Americans are currently taking advantage of self-directed IRAs. This is likely because most financial institutions don’t have the capability to offer this type of account, and financial advisors aren’t incentivized to set their clients up with this strategy.

It’s only through a self-directed investing account custodian that investors can use retirement funds to invest in real estate or any of the other asset options permitted by the Internal Revenue Service. Self-directed investing account custodians answer to the IRS just as any other IRA provider, it’s perfectly legal and it has been since the creation of the IRA in 1974.

Event Created to Help Investors Get Started

“Is it hard to do?” is a common question about investing in real estate with a self-directed IRA. It is very similar to the way you currently invest in real estate. There are just a few rules unique to self-directed IRAs that investors should be clear on before they get started.

The key to self-directed success is gaining the knowledge to confidently carry out that first deal. Realizing this fact, self-directed IRA custodian—Equity Trust—established an educational arm of the company—Equity University—to help self-directed investors become more successful.

Equity University furthered this mission six years ago with a three-day event that combines self-directed investing education from top industry experts and successful Equity Trust clients with opportunities to connect with hundreds of other investors across the country.

Based on the success of the first year, Wealth Building Summit has become an annual conference. It has grown each year, to the point that more than 500 attendees are expected for the 2014 conference, which will take place September 19-21, 2014 in Orlando. Many attendees return to the conference year after year because each conference produces a new slate of successful investors sharing their strategies.

In addition to providing the knowledge investors need to understand the unique aspects of self-directed real estate investing, the event offers a chance to discover strategies that they might never have considered or thought was possible.

Some of the topics that will be discussed during the weekend’s 30-plus hours of education include:

* An inside look at up-to-the-minute market trends from an industry authority at real estate data and insight provider RealtyTrac

* How to take advantage of opportunities in today’s real estate market, including foreclosures, rehabs and rentals

* Advanced real estate investing strategies that clients have used – and others can replicate – including LLCs, wraps, subject-tos, wholesaling and more

* Ways to invest in real estate with little money down

* Two bonus days (September 18 and 22) filled with half- or full-day workshops that provide a deeper look at specific investment strategies from the successful, seasoned veterans who are using them

Self-Directed Real Estate Deals: It’s About Who You Know

Education is just one component of successful self-directed investing; the other is getting in front of the right people. Getting to know those you might do business with and learning from the experience of seasoned investors is paramount.

The Equity University Wealth Building Summit draws more than 500 investors from across the country; some of them experienced veterans, others relatively new to the concept. Many of these investors either have an investment in mind and are short on capital, or have capital but are not yet sure where to invest it.

The Summit offers a place for both types of investors to connect. Throughout the course of the weekend, there are several opportunities to connect with as many investors as possible. A popular conference mainstay, Speed Networking offers a speed dating-like setting, giving attendees the opportunity to meet dozens of new contacts in one sitting. The potential for new connections is multiplied, as this session is offered a few times throughout the weekend.

The event also offers breaks in between education sessions and designated vendor display times to allow attendees to meet more investors and service providers to help them discover new opportunities and solutions for their investment needs.

Summit Wows Bestselling Author

Attendees have expressed that there is also a less tangible benefit of attending the conference. Once they leave the event, they’re motivated like never before to take the vast amount of knowledge and take-home strategies that they gained and actually apply them.

The conference’s 2013 keynote speaker echoes the attendees’ sentiment.

“Last year I had the absolute pleasure of working with Equity Trust to deliver a keynote presentation to their 500-plus attendees,” says financial expert and nine-time New York Times bestselling author David Bach. “The energy and enthusiasm of those that attended was simply incredible. You could really feel the sense of community at this event that Equity Trust has built over the years.”

David was so impressed with the energy and the quality of the content that was presented; he did something he had never done before as a keynote speaker: he stayed for the entire conference, participating in sessions with all the other attendees and absorbing as much information as he could.

Registration for the Wealth Building Summit is currently open, and spots generally fill up quickly.

For more details and to register, visit www.equity-university.com/summit.

MORE DETAILS:

Equity University Wealth Building Summit

The event provides 30-plus hours of real estate and other alternative investment education and provides access to 500 other investors.

September 19-21, 2014
Omni Resort at ChampionsGate
Orlando, Florida
www.equity-university.com/summit

Attendees See Real Profits from Wealth Building Summit

Here are just two examples of actual investors who gained valuable connections from attending the Equity University Wealth Building Summit. See what they were able to accomplish in the months following their first Summit.

Chris P., Strongsville, Ohio
Chris opened a self-directed IRA but was hesitant to make his first self-directed investment. He attended the Summit for the first time in 2012, where one of the speakers, a client with years of successful transactions under his belt, told the audience to make that first step and take action.

“Since that conference, I have closed on an REO home in my community, signed a two-year lease-to-own deal on it, participated in a private placement and I am in the process of signing off on my first loan,” Chris said at Equity University’s 2013 conference.

Chris credits the quality of the fellow attendees for all the productive networking he has accomplished at both conferences he attended. The deals he completed would not have been possible without all the education and connections he gained, he says.

Debbie V. and Tom F. Plymouth, Wisconsin
Like Chris, Debbie and Tom attended their first Equity University conference in 2012. That’s where they discovered the power of networking.

“We met an individual who had been here for the first time and didn’t know what to invest in,” Tom says. “He was able to become a private lender for one of our deals that became very successful for us in Wisconsin.”

If they hadn’t connected with the man at the conference, they never would have been able to make that lucrative deal, Tom says, adding it was a no-brainer to return to the conference in 2013.

“We were extremely excited to have met him, and the only way we could have done that is because we were here.”

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