Edwin Kelly from Specialized IRA Services is here today to talk about the advantages and flexibility with a self-directed IRA. Whether you need income or tax savings, there are savings and investment vehicles that can help you meet your goals that aren’t tied to the ups and downs of the market.

Today, he talks about how everyone needs a customized plan that fits their circumstances, and he talks about the benefits of using a Roth to withdraw tax-free income. It’s also possible to make creative investments like real estate. You are in the driver’s seat and can invest in anything that is legally allowed by the government.

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Show Notes [01:12] Edwin is a custodian of IRAs. [01:36] When he was young, he read and studied about some of the great businessmen. [01:55] He knew he wanted to be in business, and he was looking for a niche. [02:01] From study, he noticed that starting a business in a new industry allows your business to expand as the industry expands. [02:14] He wanted to find something that would solve serious financial problems and seemed new. He discovered self-directed retirement accounts although they weren’t really new. [02:51] Company-sponsored retirement plans haven’t worked as well for people as they thought they would, because of company limitations on investments. [03:27] A self-directed space allows someone to get complete control over their retirement account and invest in anything allowed by the government. The possibilities are endless. [03:35] Edwin found that there wasn’t a company doing what he was trying to do and he wanted to enable people to be able to invest in what they wanted. [04:01] There is some confusion about self-directed IRAs. There’s what people call self-directed and then there is truly self-directed. [05:09] Most investment banks offer a self-directed fund where you can pick anything that they offer. This is limited to stocks, bonds, mutual funds, and CDs. [05:18] A better question to ask is can you buy a foreclosed property with your retirement account and have your retirement account pay to fix it up and then put a tenant in there and collect rent tax free. [05:49] A true self-directed retirement account has a custodian who allows you to invest in anything that the government allows you to invest in without restrictions. [06:24] There are probably less than 30 firms who specialize in what Edwin’s firm does. [07:43] The government tells you what you can’t do. You can’t buy life insurance inside your retirement account. You can’t buy collectibles and no self-dealing. Most everything else is allowed. [10:27] At Specialized they create custom plans for their clients. They use individual retirement accounts. Small business retirement plans like solo 401(k)s. The last category is tax-advantaged specialty accounts. [12:25] The Roth vehicle is the only one that allows us to go from forever tax to never tax. All income is not subject to tax. [14:34] You can invest in an LLC and it can hold all kinds of assets. [16:02] Self-directed retirement accounts are going to be part of your picture not all of the tools. Look at your rate of return and see where it makes sense to put something into a retirement account. Consult with an expert and optimize. [20:10] Edwin gives an example of the power of compound interest. [23:40] An example of a 53 year-old attorney who opened a Roth late. He then built a real estate portfolio within that Roth using leverage. His monthly distribution is now $40,000 a month tax free. He built that in 14 years. Links and Resources: Loral’s Real Money Talks Specialized IRA Services…(read more)

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Controlling Your Retirement with a Self Directed IRA

retirement planning is an essential part of financial well-being, and having control over where your retirement funds are invested can make a significant difference in the success and security of your golden years. One increasingly popular option for individuals looking to take charge of their retirement savings is a Self Directed Individual retirement account (IRA).

A Self Directed IRA allows individuals to invest their retirement funds in a wide range of alternative assets, including real estate, private equity, precious metals, loans, and much more. Unlike traditional IRAs or 401(k) plans, where investment choices are limited to stocks, bonds, and mutual funds, a Self Directed IRA gives you the power to diversify your portfolio and take advantage of unique opportunities that match your investment strategy and interests.

One significant advantage of a Self Directed IRA is the ability to invest in real estate. As the saying goes, “land is the best investment,” and this is particularly true when it comes to retirement planning. Purchasing income-producing properties, such as rental homes, can provide a steady stream of income in retirement, while the property appreciates over time. This type of investment can provide a hedge against inflation and diversify your retirement portfolio beyond traditional stocks and bonds.

For those who have a passion for entrepreneurship or want to support startups, a Self Directed IRA can also be used to invest in private equity. By funding new and growing companies, individuals can potentially benefit from significant returns on their investments. However, it’s important to note that investing in private equity carries a higher level of risk compared to more traditional investment options.

Another popular option for Self Directed IRAs is investing in precious metals. With the volatility of the stock market, many see gold, silver, and other precious metals as a safe haven in times of economic uncertainty. These tangible assets can act as a hedge against inflation and provide a sense of security for retirees. Additionally, investing in precious metals through a Self Directed IRA offers potential tax advantages, depending on the specific structure of the account.

However, it’s crucial to remember that with greater control comes greater responsibility. Proper due diligence is essential when considering any investment. Conduct thorough research, seek expert advice, and carefully evaluate the risks and potential returns before making any decisions. Additionally, it’s essential to comply with the IRS regulations surrounding Self Directed IRAs to avoid any penalties or tax-related issues.

In conclusion, a Self Directed IRA can offer individuals unprecedented control over their retirement savings, allowing them to diversify their portfolio and potentially achieve higher returns. Whether it’s investing in real estate, private equity, or precious metals, the flexibility offered by a Self Directed IRA can make a significant difference in the success of your retirement years. However, it’s imperative to approach these investments with caution and seek professional guidance to maximize the benefits and mitigate the risks. With careful planning and strategic decision-making, you can take control of your retirement and secure a financially stable future.