Is Obama Capping IRAs?

April 12, 2013

It happens to me almost every presentation. Someone from the audience raises their hand during a seminar on self-directed IRAs and asks, “What is the likelihood that the government is going to take away my IRA?” Or, “will my Roth IRA indeed never be taxed again, or will Congress change their mind later when they are desperate for more revenue?”

Until this past week, I dismissed those conjectures as needless concerns from conspiracy theorists. Until the headline “Obama wants to put $3 Million Cap on IRAs” was found on the front page of the local paper. Maybe there is something going on that we need to pay attention to…

Now, of course, the political approach of making such a drastic move is first to reassure everyone that this will only target the rich, not you or I. And there is a slight inference that no one can gather such a large IRA together without some unfair advantage and extreme good fortune. In the article, recently failed GOP Presidential candidate Mitt Romney’s $100M IRA was trumpeted as the perfect example of how a large IRA is created based on insider knowledge and understanding tax law nuances.

Regardless, the rest of us in much lower tax brackets should be a bit uneasy. IRAs were created to help individuals have a shot at creating a retirement for themselves that industry and government had no stomach or ability to provide. Now over 47 million households have them, with almost $5 Trillion saved for retirement. It’s not unexpected that the government is eyeing those accounts with a great deal of interest, impatient for the tax revenues that will only come upon personal distribution of those largely pre-tax assets.

But wait, this won’t affect me – or anyone I’m likely to know. $3M is a huge IRA and not likely to be amassed by an ordinary person. Not true. For example, a person can, through a SEP IRA, contribute up to $51,000 annually. Through consistent savings and wise investing – many choosing a self-directed IRA, it is not impossible or even improbable of achieving a large balance in your IRA. We certainly have clients that would be taxed under this potential plan.

The concept of charging a tax on an IRA account which was created in the first place to provide a tax shelter to encourage savings is flawed policy. A bad idea is equally as bad regardless of whether or not it affects you or I.

Balancing the budget is something that both sides of the political aisle proclaim to be important for the future of our country. Doing it by taking it directly from retirement plans that were pledged never to be taxed is wrong.

Who knows, are Roth IRAs next?


Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando, Florida. He can be contacted at 407-367-3472 or gmather@nuviewira.com.

American Airlines’ Pilots Turn to Self-Directed IRAs for Investment Flexibility

April 2, 2013

In November of 2012, American Airlines declared bankruptcy and as a result, thousands of their senior pilots are now being forced to make decisions regarding their B-Fund retirement accounts. According to American Airlines, the pilots were given 3 options with their funds and were told to make a decision by early April, with the funds available to roll through June. These options include:

  • Roll it into a qualified IRA.
  • Roll it into the American Airlines Super Saver 401(k).
  • Take a taxable lump sum distribution.

Because the 401(k) offers only a restricted choice of potential investments and the lump sum would trigger tax penalties, most of these American Airlines pilots are seeking additional information regarding IRAs and in turn, becoming increasingly interested in self-directed IRAs because of the flexibility this type of IRA provides. In fact, it has been estimated that roughly 9,000 pilots will be rolling their funds over into a self-directed IRA during the coming months.

Self-direction drastically expands your investment options from a short list offered for traditional IRAs to a wide variety of investments including real estate, tax liens, stocks, bonds, notes, mortgages, precious metals, and other investments.

We at NuView are committed to helping investors learn all they can about self-direction and how to use it to invest in alternative investments and grow their retirement nest egg. Check out our Seminars and Webinars page on our website to discover the upcoming seminars, workshops, meetings, and webinars that can help you as you seek to make wise investment choices.

Want to Lower Your Tax Bill? Contribute to an IRA

April 1, 2013

Many think that their tax bill is set in stone at the end of the year. However, this is not necessarily true. Although most money saving options to defer income or increase deductions are limited after December 31st of the previous year, there are still a few things you can do to help lower your taxes. In fact, Turbo Tax listed “contributing to retirement accounts” as the number one way to lower taxes after January 1st.

In her recent article entitled “Claim This Last-Minute Tax Break”, Emily Brandon of US News explains, “If an employee who is in the 25 percent tax bracket contributes $5,000 to a traditional IRA, he will save $1,250 on his current tax bill. He is able to defer paying income on that $5,000 until the money is withdrawn… And if you drop into the 15 percent tax bracket in retirement, you will only pay $750 in taxes on that $5,000 later when you withdraw it.”

The deadline to fund your retirement account, both traditional IRA and Roth IRA, is April 15, 2013. Making a deductible contribution will help you lower your tax bill this year. Plus, your contributions will compound tax-deferred. For 2012, the maximum IRA contribution you can make is $5,000 ($6,000 if you are age 50 or older by the end of the year).

The tax savings from making an IRA contribution in April has the potential to be huge. Over time, you may even end up saving thousands on your taxes, depending on your contribution, income tax bracket, and the number of years you keep the money invested.

Give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about your IRA options including self-directed IRAs and real estate IRAs!  We at NuView IRA are educators and administrators, not brokers or dealers, so call us today. And as always, we wish you all the best in your investments!

As a Small Business Owner, Don’t Forget About Your Own Retirement Plan!

March 6, 2013

According to a recent American College study, 40% of small business owners have no retirement savings or pension plan. Even more, roughly 75% of small business owners have no written plan for how to fund their retirement.

As a small business owner, you likely realize the need to save for retirement, but may have put planning for it on the back burner for now. Many business owners posses the admirable quality of taking care of others before themselves. While this is noble, don’t forget to take care of yourself along the way as well. Jeff Manley, Executive Vice President of Cadence Bank put it well when he said, “Business owners shoulder the most responsibility for their businesses, yet often forget to pay themselves first.”

So, how much should you save for retirement and what IRA plans are available for small business owners? The general rule of thumb is to save between 10 and 15 percent of annual income in retirement savings vehicles. A great option is a self-directed IRA – a tax-deferred retirement account that allows creative, non-traditional investing such as real estate, notes, and private companies. For an in-depth look at more retirement plans available for small business owners, check out our blog post entitled “I Own a Small Business or am Self-Employed – What are My Retirement Plan Options?“.

Saving for retirement doesn’t have to be hard for the small business owner. Just remember to take care of yourself, as well as your employees. The right retirement plan will depend on your strategies and growth goals for your small business. As always, contact our Florida self-directed IRA administration company to learn more about the many ways you can invest in your retirement. Give us a call today at 407-367-3472!

The Delicious Dillema – What Alternative Investments to Buy with a NuView IRA

February 25, 2013

One of the most frustrating elements of a self-directed IRA is the fact that you have to find an alternative investment to make it grow. Unlike typical “off the shelf” investments like mutual funds, you may actually have to be patient and wait for the best opportunity to present itself.

However, to the patient can come choices that are hard to match in the world of publicly traded stocks and bonds.

As most of you know, I make my living as the president and CEO of NuView IRA, a self-directed IRA administrator in Florida. However, I make my retirement investments just like each of my clients – through alternative investments via self-direction. As such, I find myself researching opportunities to see what is best for my retirement account. Last week, I let a few friends know that I had some retirement funds recently come available to see what investment opportunities were out there. Among my personal contacts are Realtors, fellow investors, builders, private lenders and real estate developers. I had recently sold a property owned by my retirement account and wanted to get the proceeds back into action. Additionally, my brother had moved some funds out of his company’s 401k into a NuView IRA and he wanted to partner with my retirement and make some alternative investments together.

Now, after networking with friends and family members, I have been able to narrow it down to four opportunities. First, a private developer of luxury apartments that is offering an 8% return with further profit participation, a property wholesaler in the Orlando area who finds great deals in rental properties with cash flows at 7%, private notes for the purchase of semi-tractors, secured by the “pink-slip” at 9%, and a local Realtor who has a great property to fix up and sell, estimating a 10% return within 6 months.

Each opportunity is attractive for various reasons and rather than choose one of the four investments, I am contemplating on spreading my funds partially amongst all four. Through fractional ownership and the ability to partner with my brother’s IRA and others, I may indeed be able to accomplish my goal and achieve true investment diversity.

I do practice what I preach and like many of you, face the struggles of finding, analyzing and executing on alternative investments for my self-directed IRA. I have learned that with good networking, surrounding myself with investment professionals and understanding the opportunities self-direction affords, I too can achieve my dream of an achievable retirement.

All the best in your investments.

Glen

Retired College Professor Makes 8% a Year with His Real Estate IRA

February 19, 2013

Gordon Berger, a 70 year old retired college professor living in California, decided to self-direct his IRA to buy distressed homes and apartment buildings, which he then fixes up and rents out. In an article published in the Wall Street Journal earlier this month, Mr. Berger explained how the rental income he receives, which accounts to roughly 8% a year after expenses, helps keep his retirement fund replenished even though he is now making withdrawals from his IRA for living expenses.

“I decided I didn’t want to leave myself vulnerable by having all my retirement in stocks and bonds,” Mr. Berger said regarding his decision to self-direct his IRA to purchase real estate. Stocks and bonds are often seen as too volatile and not worth the returns. Capitalizing on the housing market through a real estate IRA can yield potential returns much higher than many other traditional investments.

With a self-directed real estate IRA, investors like Mr. Berger can take advantage of the fact that housing prices are at record lows and rental rates are relatively high. According to research published by Reis, a respected resource for real estate trends, the average nation-wide monthly rent for an apartment was $1,048 in the fourth quarter of 2012, up 0.6% from the third quarter and up 3.8% from a year earlier. This is the largest year-over-year increase since 2007!

This Friday, February 22nd, NuView IRA is holding a 3 hour CE course of how to buy and sell real estate using an IRA. At this class, attendees will learn tools and tactics for buying and selling real estate in your IRA, IRS rules and regulations to keep it all legal, the advantages of tax-deferred investing, and much more. Admission is free, but you must register to attend. Call 407-367-3472 or register online here to take the first step towards taking control of your retirement!

What will you do with your tax refund this year?

February 6, 2013

It’s that time of year again when tax reports start showing up in the mail and you receive your W-2 from your employer. Yes – it’s almost tax season again! Have you thought about what you will do with your tax refund this year?

Like any sudden in-flow of cash, your tax refund presents an opportunity to spend your money wisely or foolishly. While it would definitely be easy to blow the cash on something fun, like the latest iPhone or perhaps the hottest Coach purse, it may be wise to pay down some of your debt and/or invest in saving plans that can help you grow your retirement nest egg.

Here are some ideas to help you make the most of your tax refund this year:

Eliminate Debt: Interest has the potential to build quickly, so consider using your tax refund this year to pay off a portion of your outstanding debt, whether it is credit card debt, student loans, or a mortgage. It is smart to pay off the debt with the highest interest rate first.

Save: Most financial experts will recommend having at least 6 months of monthly income set aside for emergencies, but really any amount is better than none.

Give to Charity: Increase your charitable donations or give to those who are in need. If you need a suggestion about a great charity to participate in, check out the 2013 Hero Games, an event benefiting the Wheelchair Foundation. Your donation and participation can help provide wheelchairs to those who need them.

Invest: Consider investment options that can help you grow your wealth, such as IRAs, 401ks, etc. With a self-directed IRA, an investor can grow his or her retirement funds in traditional as well as non-traditional investments, providing more control over investment choices.

At NuView IRA, we hold many educational seminars and webinars to help you get the most out of your investment choices. At these educational events, you can learn everything from how to protect your investments to how to buy real estate with a self-directed IRA. We are educators and administrators, not brokers or dealers. Call our company of experienced self-directed IRA administrators in Florida at 407-367-3472 to discuss your investment options with a self-directed IRA.

Keeping Your Financial New Year’s Resolutions

January 30, 2013

According to a study by Fidelity Investments, 62 percent of consumers said they stuck with their financial New Year’s resolutions in the past year, compared with only 40 percent who kept other resolutions. When you think about it, a financial resolution may be easier to keep than others regarding eating better or giving back to the community because for many people, taking control of their finances seems like a more pressing, dire need in their life.

Research shows that when people have a measurable goal, they are more likely to succeed with their resolution. Therefore, if your New Year’s Resolution is to take control of your finances, create a measurable goal for your financial health. If you don’t know where to start, consider these three main areas of financial health: zero consumer debt, adequate emergency reserve funds, and maximization of IRA contributions.

According to The Investment Company Institute (ICI), only 39% of US families even have an IRA. In addition, many people who have IRAs are only contributing up to the level at which their employer matches, which is often 6 percent. However, for most people, 6 percent will not be sufficient in the long term. Chances are, you will probably need to put away 15 percent (or more) of your salary to hit your financial goals.

A self-directed IRA is a great way to unlock your IRA and take control of your retirement plan. Self-direction significantly expands your investment options to a wide variety of investments including real estate, tax liens, stocks, bonds, mortgages, notes, precious metals, and other investments. There is a myth that you have to have a lot of money to get started with self-direction, but we debunked this myth in our blog entitled “How to Take Advantage of a Self-Directed IRA with Just $5,000”.

Consider these ideas as you work to improve your financial health in 2013. As always, NuView IRA is here to provide you with the professional service you deserve. Call our company of experienced self-directed IRA administrators in Florida at 407-367-3472 to discuss your investment choices within a self-directed IRA and to start building momentum toward your financial goals for this year.

To Whom Much Is Given, Shall Much Be Required

January 24, 2013

“Whatsoever your hand findeth to do, do it with thy might” (for there is no work, nor device, nor knowledge, nor wisdom, in the grave, whither thou goest)”  Ecclesiastes 9:10.  Since your IRA is primarily to benefit you prior to the grave, it would make sense that your hand (or efforts) be trained on making your investments grow.

Why should we not be as diligent with our investments as we are with our labor?  After all, the Bible also says that for everyone to whom much is given, of him shall much be required.  If we have the talent to make and save money, shouldn’t there be an additional requirement to invest it wisely?

I know that I get particularly uncomfortable when I have funds that are not invested, or those that are under-performing their potential.  For example, while many may be comfortable in owning CDs that are paying a rate of 2%, I would be distraught knowing that better yielding choices were available of which I did not take advantage.  That is the beauty, and responsibility of a self-directed IRA – it is up to you to seek the best balance of risk and reward, not a money manager or a mutual fund.

Retirement, and the costs of doing it comfortably, let’s face it, can be expensive.  Make it a priority to surround yourself with advisors that can help you in your choices.  If you are interested in real estate, introduce yourself to local real estate investment clubs, Realtors,  property managers, and others who live in that world daily.  If you want to invest your IRA in emerging businesses, speak with entrepreneurial organizations, CPAs, and attorneys that may be aware of new opportunities.

Come to NuView IRA client events, and use the ideas and energy of others to help propel your dream of retirement forward.  After all, we all age at the same rate, at least chronologically, and sooner or later, we will stop working and depend on our savings.  Use self-direction as an important tool to get there – thousands of our clients are doing it “with all their might”.

All the best in your investments…

Glen

US Financial Uncertainty Sparks Investor Interest in Self-Directed IRAs and Real Estate IRAs

January 22, 2013

Many retirement investors are concerned about how the fiscal cliff and swelling federal debt will trigger higher taxes and budget cuts in the coming year. Therefore, in light of the looming financial issues confronting our country, many savvy investors have left Wall Street and are looking to lessen the impact of higher taxes with more tax-efficient investments like self-directed IRAs and real estate IRAs.

With a self-directed IRA, an individual can invest his or her retirement funds in traditional as well as non-traditional investments without paying tax currently on any income or gains, and thus escaping the increased investment tax rates. Instead of paying tax on the self-directed IRA returns of an investment, tax is paid only at a later date when a distribution is taken, leaving the investment to grow tax-free in the meantime.

The same holds true with a real estate IRA. Instead of buying real estate with personal funds and being subject to higher income and capital gains tax rates, a self-directed real estate IRA will allow an investor to buy real estate without paying tax. Also, all income and gains generated by the real estate IRA investment will flow back to their IRA tax-free. By using a self-directed real estate IRA to make investments, the IRA owner is able to defer taxes on any investment returns until a distribution is taken, thus benefiting from tax-free growth.   Better yet, within a Roth IRA, taxes may never be due.

Taxes are heading up, not just for individual earnings, but for capital gains as well.  It makes sense to explore new avenues for investments that are more tax efficient in order to shelter the maximum earnings for your retirement.   Give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about your options with a self-directed IRA or a real estate IRA!  We are educators and administrators, not brokers or dealers, so call us today.