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Beware: 6 Fallacies About Retirement Plans

August 29, 2019

1. You must invest in stocks, bonds, and mutual funds to be compliant with the IRA

Not true – Since 1975 the rules for IRA investments have been relatively consistent, as long as you avoid collectibles and life insurance, most other assets can legally be held in an IRA. It is a Wall Street myth that has caused the general public to ignore the potentially higher returns of private, non-traditional investments.

Of course, you are not allowed to own your own home in your IRA, nor give or get any personal benefit from your retirement plan — those prohibitions can be found in section 4975 of the IRS code. Steering clear of those disqualified people and the prohibited transactions they may engender is relatively easy, and the potential of an unlocked IRA is powerful.

Instead of the traditional investments that often come with large sales loads and hidden fees, you can now make your own choices. Want Gold as a hedge against other investments or just distrust of the Federal Reserve actions? Buy it in your IRA. Lend money, buy tax liens, buy stocks in a private start-up, or fund a joint venture, ail legally in your IRA. The choice is yours, not your brokers.

2. Your investments are to be controlled by a bank or a brokerage house

It is true that your IRA assets must have a custodian, and that is usually a bank or a brokerage house. There are a few trust companies, however, that permit you to direct your investments from your choices, rather than selling commission-based offerings. A self-directed custodian provides that freedom.

In addition, some IRA clients have utilized the service of a professional, often a CPA or attorney, to create a single member LLC. Using this structure, the IRA holder can instruct their custodian to fund the LLC and thus become the sole owner of the LLC.

This single member LLC, once properly established, now has “checkbook-control”, enabling expedited access to funds to make permissible IRA investments, and deposit receipts from income derived from those investments. Under this structure, a custodian is still required, but the only holding would be the shares of the LLC.

Should you want to make a contribution, or take a distribution from your IRA, that would need to happen through a request of your IRA custodian.

3. You cannot own real estate in your IRA

Not true — thousands of NuView Trust clients hold real estate in their accounts, from single family home rentals to commercial buildings and shopping centers. They can be held in LLCs, partnerships, or just in fee- simple titling. In many situations, an IRA can also be leveraged through non-recourse debt, further expanding its’ purchase : capability.

Imagine owning cash flowing real estate in your Roth IRA. Not only is the income tax free inside your IRA, but can be distributed tax free to you once you have had the account opened five years and are older than 59 %. Another significant – benefit is that when you leave that IRA to your youngest heir, they can get tax free distributions over their life-time as well.

4. You cannot move your IRA funds offshore

There is no requirement for your funds or your investments to be located inside the United States. As long as the custodian is domiciled in the US, you can purchase investments in most any jurisdiction, as long as the IRA has the ability to take legal title.

Investments can mirror the types available in the US, including businesses, LLCs, Real Estate and much more. We have hundreds of clients who have invested in a wide variety of opportunities outside the USA including resort properties, raw land, agricultural real estate and private companies.

5. My Financial Planner Says that Buying Non-Stock Market Assets in my IRA is Risky.

While every investment decision contains some element of risk, the structure of self-direction does not. At Nuview Trust, we are licensed to provide instruction to CPAs, attorneys, Financial Planners and Real Estate Professionals about the power, possibilities and rules of holding alternative assets in a retirement plan. There may be financial reasons why advisors prefer their clients to invest traditionally in the stock market — but it may not be best for you.

6. It’s Complicated and You must pay a custodian high fees to set up a self-directed IRA

With NuView Trust, you may start your account for $50, and as little as $195 per year, $295 once an investment is made. It’s also easy; you can open your account online in just a few minutes. Imagine the freedom of completely controlling your investments, away from the commissions and fees of the stock market. Now you can move quickly to secure the investments in the right markets, and in the geographies that you desire.

Glen Mather is founder and CEO of NuView Trust, a leading custodian of self-directed IRAs, HSAs and Specialized 401Ks. For over 15 years NuView has helped thousands of clients invest billions of dollars within their retirement plans, largely free of taxes. To see if you qualify for a self-directed retirement account, simply call (877) 259-3256, or visit www.nuviewtrust.com.