Archive for May, 2017

How a Gold IRA Improves your Retirement Account

Monday, May 22nd, 2017

Not a whole lot of people know you can invest in gold, nonetheless, invest in gold with a gold IRA. But you can and for some retirement savers, it’s the answer they’ve been waiting for. If you’re the type that likes to invest in commodities or hard assets, then a gold IRA might have what you’re looking for. Here are a few examples of how a precious metal IRA benefits everyday savers like you and me.

Hedging against U.S. dollar

A lot of investors, in times of economic instability, turn to commodities as an investment. The reason for this is that generally, hard assets like gold, oil and natural gas retain their value when the dollar does not.
Usually, gold’s price per ounce rises during inflationary periods, or as consumer prices go up. So as the cost of day-to-day living increase, so in turn does gold’s value. This is how you help protect your purchasing power.

Portfolio diversification

Precious metals historically have a weak correlation to price movements in the financial markets. Especially the stock market, which give you the advantage of avoiding market volatility. Best advice is to get your retirement account solely out of the stock market, with a gold IRA. To place your bets on only one investment type can be dangerous. With foresight and a trusted investment advisor, you can carefully diversify and avoid a potential crisis.

Steadfastness

One of the biggest reasons that investors choose gold and other precious metals is stability. Precious metals get a reputation for being a “doomsday” investment, the type of investments that you make if you’re uncertain of the economic future. There’s a great reason for this. Number one would be that gold has been around for as long as anything else on earth, and it’s still used in our everyday life. Number two might be that there’s a finite amount available, thus making it valuable, just by its existence.

 

Get Yourself Caught up on Retirement Savings

Monday, May 15th, 2017

 

If you’re struggling to get that retirement savings tucked away, don’t stress. It’s unfortunately not uncommon for Americans to have trouble in this department. Or for Americans to have trouble saving at all. Whether it’s low-wages to blame or pressure to keep-up-with-the-Joneses, we’re flat out bad at it. The good news is that there are a handful of tactics you’re able to do in your later years to get caught up.

Get invested in real estate

When you start your retirement savings late, traditional investments like stocks and bonds have less time to accumulate returns. If you were to, however, put that money into buying a rental property, you can have a steady stream of income for as long as you can keep tenants in the building. Whether or not this is a strategy for you will depend on your situation and income. Before you start any investments, seek out a trusted financial planner. Pursuing real estate as an investment option isn’t for the passive investor, but it’s well worth it.

Use your own home for income

If you own your own home, it can potentially be an excellent source to tap into for retirement savings. Here you have a few options. Homeowners can directly get into the equity that’s been poured into the house through either a home equity line of credit or, more drastically, a reverse mortgage. You can also sell your house outright and move into a smaller/cheaper house, putting the funds from the sale aside in savings. Or you can simply rent out a room and earn money that way. Renting out is a great option if you live near a college, students make good tenants.

Eliminate standing debt

 Some financial experts would say that step one in retirement savings is to eliminate current debt. Makes sense, right? In order to fully focus on saving for retirement, you first have to clear away your credit card debt, medical debt, etc. Monthly payments on debt only detract from you being able to save for retirement, plus the potential monthly interest only eats into your income. Make your debt your priority, take it seriously, tackle it, and move on. Once you’ve offloaded the most dangerous debt, eliminate less expensive debt like mortgages, car payments, and any remaining student loans. Getting rid of those monthly payments will allow you to redirect your money where you want. 

Is Investing in Real Estate for your IRA?

Monday, May 1st, 2017

Real estate is definitely one of the more lucrative, and sought-after investment types. The reason it’s so sought-after is that the possibility of return on real estate investment is higher than other types. Plus it’s familiar, right? The question though is whether or not it’s right for you, and your IRA.

First thing’s first

You first need an IRA that’s held by the custodian and administrator of your choice. The custodian reports to the IRS on deposits, withdrawals, and year-end balances. Custodians hold your real estate IRA funds like a bank, so that your investments are IRS-compliant; because one of the easiest ways to get your IRA disqualified by the IRS is if it’s found to be in violation of IRS rules. So, to avoid that, choose a custodian wisely.

Speaking of rules, here are some more:

  • The IRA owner isn’t allowed to work on the investment themselves. Say you bought a fixer-upper through your IRA, it will need lots of work, right? You’re actually not allowed to do the work yourself, you will need to hire a contractor to take care of that for you.
  • All costs associated with the property must come from your IRA, and any income earned from that same property must also funnel back into your IRA.
  • You cannot live on the property that’s funded by your real estate IRA. It must be used as an investment property only.

Direct benefits and use

To expound upon what we mean by you’re only allowed to use your new property only as an investment property, and not for personal use, is simple. Since the property is legally owned by your IRA, it cannot be used as a vacation home for you or your family. Period. You also cannot use it as a rental home for your family. So no vacations, and no renting to your own family.

It may not be for you

There are a lot of technical and legal loopholes to jump through when you own real estate. It only gets more complicated when it’s an investment property. And even more so when it’s an investment property through your IRA. For those reasons, a seasoned real estate investor will catch on quickly, while a novice will have not only the real estate biz to study but also the real estate IRA world.

By no means is this suppose to discourage anyone from seeking real estate as an investment, you just have to know what you’re getting yourself into. It may be hard work at times, but the promise of rewards makes it worth it.