Posts Tagged ‘self directed ira’

IRA Rollover Mistakes You Cannot Afford to Make

Monday, March 19th, 2018

IRA Rollover Mistakes

There are times when having an IRA can be trickier than anticipated. There are a lot of rules to follow, there are papers that need to be signed, certain accounts that have to be opened, and sometimes it can be intimidating. This is one reason why having an experienced administrator and custodian on your side is so imperative, to help you steer through the (sometimes) bureaucratic ins and outs.

One unexpected trip up that we’re going to be talking about today is rolling over an IRA. Seems like it should be simple, but there are mistakes that could be made that can cause some serious headaches as some of you might already know. And when it comes to IRAs, we are not talking small potatoes; IRAs accounted for about 28% of all U.S. retirement assets, which totaled $19.5 trillion at the end of 2012. And this market is only going to get bigger, because, at the end of 2017, Americans rolled an estimated $451 billion into IRAs, making this an $8 trillion marketplace. This is part of the reason that there’s a lot of red tape. This is also why it takes time and patience and know-how. The best way to avoid the headaches is to avoid the potholes, to begin with.

The 60 Day Rule

The 60-day rule is one that you will want to be aware of well before you go through an IRA rollover. If you set up the IRA rollover to go through your hands before it goes to another brokerage, then you will be subject to this time limit. If you get the check for the full amount of money and do not get it to the next IRA account within 60 days, it will be treated the same as a cash-out. This means that you will have to pay a penalty of 10% then pay income taxes on the amount. The solution to this is to be sure to make sure that you get the money to your new broker within 60 days to avoid this mistake.

Leaving Assets in a Former Employer’s Retirement Plan

When you leave an employer, you typically have the right to roll over your entire vested balance into an IRA. A few reasons that you should is that you may gain access to a much wider array of investment options through your new employer, or administrator, they may offer attractive services like a gold-backed IRA, or a self-directed IRA, which help to diversify. Also, your beneficiaries may be able to take distributions over their lifetimes, which allows for a longer period of tax deferral that could extend even after your death, and you can avoid the 20% mandatory withholding for distributions if you rollover your retirement plan to an IRA.

Taking the Cash

When you cash out an IRA too early, you will be subject to some serious penalties. For one thing, you will have to pay a 10% early distribution penalty right off the top, then, on top of that, you will also have to pay income taxes on the entire amount. Depending on what tax bracket you’re in, this could be a pretty substantial amount of money that you lose to the government. There is a process for rolling over your IRA without paying taxes, so you should not just tell your IRA provider to send you the cash and you will later find a new IRA to deposit into. You need to have everything planned out ahead of time, this way you can avoid the fees and keep the full amount of your retirement money.

One Year Waiting Period

Another rule that everyone needs to be aware of is the one-year waiting period, it applies to making multiple rollovers from the same account. So for example, let’s say that you have an IRA and you decide you are going to open another IRA account, and you then rollover part of the money to the new account. Then later that year, you decide that you wanted to open a third IRA account, but if you try to fund the third account from the first account, you would be in violation of the rules, because you have to wait at least one year before you can rollover for a second time from the same account. The solution is to make sure that you wait at least a year before trying to rollover your account again.

Navigating the retirement waters can be a bit tough at times, but with an experienced administrator, like Accuplan, at your side, there’s very little that we cannot handle together.

Tapping into Multiple Retirement Income Avenues

Monday, February 19th, 2018

If you’re a lucky enough of a person to have a pension, a matching 401K, or any other type of retirement saving option, and you’re fully taking advantage of those benefits, then this article may not be for you. This is more geared towards the 70% of American’s who have either less than $1000 saved for retirement or nothing at all. The thing is, there is more than one way to save for retirement, you don’t have to fully depend on your employer.

Self-directed IRA

A self-directed individual retirement account is an account that you can open with the custodian of your choosing (so long as they offer this account type, some don’t for varying reasons). You contribute funds to your account either after-tax as a Roth IRA or before-tax, as a Traditional IRA. The reason investors like self-directed IRAs is that they’re self-directed, meaning you choose what your money is invested in. You can invest outside of the stock market and into real estate, precious metals, small businesses, farmland, the options are almost endless.

Rental income from SDIRA

Among the short list of assets you can invest in above, we’re going to focus on one, real estate. The reason for this is obvious, right? The money that can be earned on investment property is what makes it such a lucrative and sought-after asset type. Not only is there money to be made on buying and selling, but getting a steady income from tenants is what we’re all ultimately after. When you buy a property through your self-directed IRA, any and all costs associated with that property are paid for through your IRA. Any repairs, HOA fees, maintenance, it’s all paid for by the IRA.


Annuities can be looked at as retirement insurance, because they’re essentially for uncertain times. To put it frankly, the longer you live, the more care you’ll need, and thus, the more strain on your finances. Even if you were diligent about saving for retirement all throughout your career, it sometimes might not be enough. A fixed annuity, which offers a lifetime income stream at a set rate of interest, is one way to manage that risk. You can even buy deferred annuities that don’t pay out until you reach a certain age. Once they kick in they offer bigger payouts than immediate-annuity products.

What you Didn’t Know was Possible with your IRA

Tuesday, November 7th, 2017

It’s not difficult to imagine that the majority of U.S citizens have heard of an IRA. It’s equally imaginable that most have not heard of a self-directed IRA. A self-directed retirement account gives you the ability to invest in non-traditional investments. In all reality, though a self-directed IRA is the same thing as a regular account. Because they are the same thing and the only real difference is what your custodian allows I wanted to explain a few things that you need to know about an IRA that you may not have known.

You can invest in so much more

Most retirement accounts are invested in stocks and bonds, but they don’t have to be. What most don’t know is that a self-directed IRA is really just a custodian that allows you to take full advantage of your retirement account and invest how you want with you. Most custodians only allow for certain types of investments, like stocks and bonds. Why is that? More than likely it is because they make more money by pushing other investments. Or it could simply be because it is not in their wheelhouse. The truth is though with an IRA you can invest in just about anything. You can invest in real estate, gold or even private placements.

You can pay for college

You can without penalty withdrawal funds from your IRA to cover the cost of tuition. There are a few issues to be aware of when doing this though and that is why it is important to talk to a tax attorney or CPA when dealing with this.

Whether this information is new to you or not you can gain from this knowledge. What you can gain from this is that you can do more with your individual retirement account than you probably are doing. If that means using your funds for things like education or if it means investing in things other than stocks and bonds. You can find a way to maximize your IRA for what works for you.

Control your Investments With a Checkbook IRA

Monday, October 9th, 2017


Do you have an IRA or a 401K? According to the Federal Reserve’s Survey of Consumer Finances, in 2013, about 45 percent of households aged 25 to 64 had balances in retirement accounts. Do those 45 percent of Americans know what their retirement accounts are invested in? Most likely not, and that doesn’t bother most people, but if you need more out of your retirement account, then a checkbook IRA might be for you. The freedom that comes with a checkbook IRA allows you to invest in real estate, precious metals, and other hard assets. So how does it all work?

What is a Checkbook IRA?

A checkbook IRA is the same thing as a regular IRA except that the custodian allows you to take control of the checkbook for the IRA. What does that exactly mean? With a regular IRA you have to go through your custodian when making any investments for your IRA. If you wanted to purchase gold with your IRA, you would have to contact your custodian and let them know what you are wanting to do. You would then have to work with them to finalize the investment. If you have a checkbook IRA, instead of going to the custodian to make the investment happen, you do it yourself.

Setting up

Another name for a checkbook IRA is a self-directed IRA LLC with checkbook control. It’s called this because to establish a checkbook IRA, you must establish a limited liability company (LLC) that is owned by the IRA, and managed by you, the account owner. Then the IRA owner’s funds can be transferred by the custodian to the new IRA LLC bank account. Because you are the manager of the IRA LLC, you will have the authority to make investment decisions on behalf of the IRA. With this authority, you then have the ability to write checks from the IRA LLC bank account for your investments. Thus, cutting out the middleman.

With a checkbook IRA, you’re able to invest in the things you want without hassle or waiting for someone else to do as you’re asking. You’re in control, so you have the power over what you’re investing in, and the owner of a truly self-directed IRA.

Self-Directed IRA Rules and IRS Regulations

Monday, September 11th, 2017

If you’re new to the retirement world, you may be feeling overwhelmed by the amount of jargon and rules. If you familiarize yourself with the essential rules, you can avoid penalties, and reach your retirement goals.

Disqualified persons

One of the easier ways someone can violate self-directed IRA rules is by not understanding who exactly is a disqualified person. These people include the IRA owner’s parents, spouse, their children, and grandchildren. These people are excluded from benefitting from the IRA owner’s investments, for example, if the IRA owner’s adult child needs a home to rent, and the IRA owner has property in their IRA, their child cannot stay in that investment property.

Investment Types

The first thing you learn about self-directed IRA rules is that you, as the owner, are allowed to invest in pretty much anything you’d like. For the most part, that’s true, but there are limitations and exclusions to keep in mind. The IRS has a handful of basic assets that aren’t allowed:

  • Life insurance
  • Collectible items (like paintings, antiques)
  • Gems and coins

Borrowing and lending money

Borrowing and lending in a self-directed IRA gives the owner the ability to loan their IRA money to non-disqualified persons. How it works is that if pre-agreed to, an IRA can receive a certain amount of principal and interest, just like a bank would. What’s appealing is that the IRA holder chooses who to lend to, the interest rate, the principal amount, length of the loan, payment amount, and frequency, and whether the loan is secured by collateral or not.