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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.