Archive for December, 2015

Checkbook Control Q&A Part II

Thursday, December 17th, 2015

Checkbook control 2

A Self Directed IRA’s ownership of a LLC, or an ICO as it’s also called, is a special purpose limited liability company, which is either fully or partially owned by an IRA. Since the self directed IRA owns the ICO, IRA funds can be legally transferred to the ICO in exchange for shares of the ICO. After this funding, both traditional and nontraditional investments may be purchased by the ICO instead of directly in the IRA.

Part one is here.

Q. I currently have a real estate LLC, can I roll it over to a new IRA LLC?

A. That depends on a couple things, like if your IRA currently owns your LLC, then you can roll it over to a new IRA, but if the LLC is currently held outside of your IRA, then you must form a new LLC for your IRA. For a new LLC, you must create a specific operating agreement that meets the regulatory requirements in order to structure your retirement account in this way.

Q. Will I have to hire an attorney?

A. Most custodians will require that an attorney draw up the necessary paperwork to form an LLC, and with good reason. For one thing, the requirements for the language that must be used in the operating agreement are usually not known by the IRA account owner. For example, specific language regarding prohibited transactions and the application of IRS Code 4975 must be present in the documents, as well other language regarding UBTI (Unrelated Business Taxable Income) and capital contributions to the LLC. In addition, having an attorney draw up the documents associated with forming the LLC gives the client peace of mind that a professional is overseeing the development of the entity and that the process is being followed correctly.

Q. Why have an LLC instead of just having my self-directed IRA?

A. The number one reason for people is control, because you receive a tangible checkbook that is linked to a checking account that’s set up in the name of your LLC under its own tax ID number. So when you find an investment that you want to purchase, or if you own real estate and there’s a plumbing issue, you can just write a check. There’s no filling out paperwork, waiting to get approval from the administrator, or waiting for someone else to fund the investment, because you can easily take care of it yourself.

Make Room in Your Budget for Retirement Savings {infographic}

Monday, December 14th, 2015

Retirement savings - norm

Living on a budget can be tough, especially if you’ve had to make cuts to your spending in the past to make sure you’re living within your means. But even if you’re living well within your means, and you’re still not saving for retirement, all that budgeting can be for naught.
The fact is that a majority of Americans don’t have a regular savings account, and an even bigger majority don’t have a retirement savings account.

Here are the stats:

Click to enlarge:

Retirement stats

Four Personal Finance and Retirement Blogs We Love

Thursday, December 10th, 2015

pf and ret blogs

There are an array of topics that we cover on our blog here at Accuplan, but there are multiple blogs that we read almost daily, and they’re all fantastic, but here are just four of our favorites.

The Empowered Dollar

the empowered dollar banner

Creator of the blog, Stephanie, is a twenty-something who loves to blog, loves to draw and loves to help people with their money.

Personal finance changed the way I view the world. When I graduated from college, I was making barely minimum wage with over $30,000 in debt to my name. I knew something had to change so I took control of my finances and started helping others do the same. I started the Empowered Dollar to chronicle my journey of paying off almost $35,000 in student loans in under 4 years and bring a little more doodling into the personal finance world.


Find The Empowered Dollar on Facebook

Mr. Money Mustache


Mr. Money Mustache is a thirtysomething retiree who now writes about how we can all live a frugal yet Badass life of leisure.

My wife and I studied engineering and computer science in Canada, then worked in standard tech-industry cubicle jobs in various locations throughout the late ’90s and early 2000s.

Then we retired from real work way back in 2005 in order to start a family. This was achieved not through luck or amazing skill, but simply by living a lifestyle about 50% less expensive than most of our peers and investing the surplus in very boring conservative Vanguard index funds and a rental house or two.

Follow Mr. Money Mustache on Twitter

Afford Anything

afford anything
The founder of Afford Anything, Paula Pant, resides in Las Vegas, Nevada, but she’s traveled to over 35 countries. She’s passionate about yoga, hiking, animals, investing, and podcasting, among many other things.

When she graduated from college, she was lucky enough to land what she thought was her dream job. She worked as a newspaper reporter in a beautiful town in Colorado, liked her job, and loved who she worked with. But there were underlying issues: She was underpaid and overworked. And fed up.

At her dream job in 2005, she was making just over $20,000/yr, but tried to make the best of the situation. Regardless of living below her means, Paula was still was able to make a 15% contribution to her 401(k), and had no debt. She was happy, but her life lacked something fundamental. Freedom.

Find out how Paula planned her escape from the mundane, and found her freedom.

Find Afford Anything on Facebook


Learn Vest

In 2009, Alexa von Tobel dropped out of business school to start LearnVest. With a dedicated team of financial planners, behavior experts, and tech gurus, LearnVest brings you a plan for your money at a fraction of the typical cost.

Money is central to our lives

We make tons of financial decisions every day. Wouldn’t it feel good to make those choices with confidence? Unfortunately, many existing financial planning services are kind of like doctors who only treat healthy patients. They’re geared toward those already walking in the door with financial success rather than to the rest of us who might not even know where to start.

LearnVest is here to change that.

Find LearnVest on Twitter

Myths About Self-Directed IRAs That Need to Get Busted

Monday, December 7th, 2015

true or false

For as great of an investment option that self-directed IRAs are, a lot of people don’t know much about them, if anything. A majority of Americans think that paying into their 401k monthly is enough to retire on, and give retirement no more thought after that.
As self-directed IRAs are not very well known, there’s a lot of misconceptions about them, and myths that might deter someone from opening one, so we’re here to bust those myths today.

Contributing to a 401k and an IRA at the same time

Myth: You can’t have a 401k and an IRA open at the same time.
False. Some people believe that because they already have a 401k plan through their employer, that they can’t also have a self-directed IRA. This is FALSE. You can make IRA contributions even if you contribute to your employer plan. But, keep in mind that there are income limits that could limit your ability to deduct those IRA contributions. For Roth IRAs, there are income limits that limit your ability to make a Roth IRA contribution. Here’s the list of contribution limits from

What can be purchased through your IRA

Myth: You can only invest in the stock market with a self-directed IRA.
False. There are only a handful of items that are prohibited from being purchased with your IRA. The Internal Revenue Code for IRAs states that there are investments in life insurance contracts and in collectibles that are not allowed. Collectables are defined to include any work of art, any rug or antique, any metal or gem (with certain exceptions for gold, silver, platinum or palladium bullion), any stamp or coin (with certain exceptions for gold, silver, or platinum coins issued by the United States or under the laws of any State), and any alcoholic beverage. After those few things, you can invest in almost anything with a self-directed IRA.

Personally using real estate property

Myth: You can personally use property that’s owned by your IRA.
False. This might be one of the biggest slipups that IRA owners who invest in real estate make. Personal use of the property that’s owned by the IRA is prohibited by you, the IRA holder, or any of your relatives. The ability to use your IRA or other plan assets as a source of funds and to acquire real property as an investment is the goal, not to gain property for personal use.

Having a small amount in your IRA account

Myth: I have a small amount in my IRA account, there’s no point in opening a self-directed IRA.
False. Small balance accounts can absolutely participate in investing, and should participate in investing to help that account grow. Small balance accounts can be co-invested with larger accounts owned by you or even other people, it’s a pretty common occurrence as a typical IRA doesn’t reach large amounts many years in, so many see this as a piggyback to a healthy IRA.

It does take time to get your retirement accounts where you want them, but with the alternative investments that self-directed IRAs offer, you’re bound to reach those goals and then some.

Good News for State Retirement Savings Initiatives

Thursday, December 3rd, 2015


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At any moment in time, less than half of private sector workers (ages 25-64) participate in any form of employer-sponsored retirement plan. The lack of universal coverage means that many workers move in and out of participating in a plan and a significant fraction will end up with nothing at retirement beyond Social Security.

And Social Security will provide less in the future than in the past because of the increase in the “Full Retirement Age” from 65 to 67, rapidly rising deductions for Medicare premiums, and more households paying tax on their Social Security benefits. Without additional retirement income, many retirees will face a sharp drop in their standard of living. They need a retirement plan.

President Obama has proposed a national Auto-IRA program whereby any employer not offering a plan would be required to auto-enroll its employees in an Individual Retirement Account (IRA). Unfortunately, Congress has failed to enact this proposal. In the absence of any legislation, the Treasury has introduced the “MyRA,”a cleverly designed “starter” option based on a Roth IRA. But without auto-enrollment, take-up of MyRAs is likely to be modest.

Into this breach, enter the states. First California, then Illinois and Connecticut, and now Oregon have either adopted or are considering their own versions of auto-IRA programs for their uncovered workers and are moving toward implementing them. Employees would be automatically enrolled in these programs unless they affirmatively opt out. Many other states are contemplating such an arrangement.

Hanging over these initiatives, however, has been the concern that a state-run, auto-IRA program would fall under the auspices of the Employee Retirement Income Security Income Act of 1974 (ERISA). While ERISA offers many consumer protections, it also involves significant reporting and disclosure requirements and stringent conduct standards for plan fiduciaries. Several of the states have indicated that if their plan were covered by ERISA, they would not proceed.

The ERISA cloud has now been lifted by the Department of Labor’s new proposed rule for “Savings Arrangements Established by States for Non-Governmental Employees.” The rule establishes a safe harbor such that state-run payroll deduction IRA programs with automatic enrollment would not be considered an employee pension benefit plan under ERISA.

The Department of Labor in a 1975 regulation said that ERISA does not cover an IRA payroll deduction arrangement if four conditions are met: 1) the employer makes no contributions; 2) employee participation is “completely voluntary;” 3) the employer does not endorse the program and acts as a mere facilitator; and 4) the employer receives no consideration for his expense.

In 1999, DOL loosened up on #3 to allow employers to furnish IRA materials, answer employee inquiries, and encourage retirement savings through IRAs generally.

#2 – the “completely voluntary” language – remained the sticking point. Courts have held that “opt-out” arrangements are not consistent with a “completely voluntary” requirement.” Therefore, the state payroll deduction IRA initiatives underway do not met the 1975 safe harbor requirements.

But the Department of Labor acknowledges that the 1975 requirements were not written with a state-sponsored program in mind. The state mandating that the employer automatically enroll its employees is very different from the employer setting the terms of a program and administering it. Therefore, the Department proposes to introduce a “voluntary” standard that permits automatic enrollment with employee opt-out features. This change would remove uncertainty and make it less likely, if litigated, for the courts to conclude that these state programs are covered by ERISA.

DOL has asked for comments by January 19, 2016. Hopefully, this new rule will stir little controversy and the states can get on with their initiatives.

See the original article at

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