Investing and Your IRA
The government allows us to put money aside for old age in Investment Retirement Accounts. Did you know you can do more than keep it in a mutual fund, bank account, or in individual stocks? Most people think that those are the only investment vehicles allowed. Not so. The IRS says that you can place you IRA in any investment except collectables or life insurance.
I am not talking about closing your IRA and taking an early withdrawal penalty. The key is changing to a Self Directed IRA where you control where the money goes.
Here are some things you can do with your self directed retirement account:
- Invest in Real Estate by paying cash from the account.
- Your IRA can take a loan out as a mortgage
- Your IRA can become a partner with another IRA or another person
- You can make a secured or unsecured loan to someone or a company
- You can invest in a company or partnership
- You can invest in a retirement property now and rent it out. Convert it to your retirement home in the future.
- Buy stocks or bonds like with any other IRA account
- Buy a commercial building or business anywhere
- Buy a rental property in a college town
Here are some things you are not allowed to do under IRA rules:
- Make loans to close family members
- Own IRA property and rent to family members
- Buy a collection of antique cars or art work
- Buy a second home for your own current use (may be converted to personal use at retirement)
- Buy life insurance
Why am I writing this? Because your stock broker is not going to tell you about it. He makes money every time you make a trade. Since you can still buy and sell stock in a Self-Directed IRA with a phone call to the trustee.
What is the real advantage to holding your retirement funds in a Self Directed IRA? You can invest in things that are more tangible than stocks. You can tough and feel land. You can walk into your rental property. You can control a business you are directly invested in.
A Self-Directed IRA trustee will have guidelines to lessen the risk and make sure you have the funds to do what you want to do. They have CPA’s ready to answer your questions and assist you.
Jerry Germansen, Associate Broker, eXp Realty Arizona
www.AllofPrescott.com 928 632 3906