| Today, it's no secret that most baby boomers are | | | | retirement plans include the SEP (Simplified Employee |
| now playing 'catch-up' with their retirement funding. In | | | | Pension Plan) IRA, the SIMPLE (Savings Incentive |
| just two generations, the career world has been | | | | Match Plan for Employees) and the Solo 401(k) Plans. |
| completely transformed. Lifetime employment at a | | | | For example, there are two components in maximizing |
| single employer with a gold watch and a guaranteed | | | | the Solo 401(k) plan: (1) An employee salary deferral |
| pension at the end is now a relic of the past. | | | | contribution up to $15,000 (not to exceed 100% of pay); |
| Moreover, once 'un-touchable' social security trust | | | | and (2) An employer profit-sharing contribution with a |
| funds have been routinely invaded by heavy | | | | limit up to 25% of pay (20% for self-employed). The |
| Congressional borrowing for decades. It's not | | | | total contribution from both sources is $44,000 but with |
| uncommon today for people to change jobs, homes or | | | | a 'catch up' provision for individuals age 50+ who can |
| locations every few years. Most now realize they | | | | contribute another $5,000 for a $49,000 annual |
| have primarily responsibility for the size of their | | | | contribution. |
| retirement income. But at the same time, with longer | | | | HOW TO STAY IN COMPLIANCE. |
| life expectancy, improved health care and better | | | | To maintain the tax-advantages of your Self-Directed |
| lifestyle choices, most adults know that inflation will | | | | Retirement Account, you need to avoid what the IRS |
| decrease the purchasing power of social security | | | | calls 'Prohibited Transactions' (which are basically |
| benefits. However, many have relied solely on the | | | | self-dealing type of transactions). These include selling |
| Social Security as their sole means of saving for | | | | personal property to your IRA; using your IRA as |
| retirement. They now know that will mean living in | | | | security for a loan; borrowing money from your own |
| poverty during their retirement years. | | | | IRA; purchasing property for personal use with IRA |
| SELF-DIRECTED RETIREMENT ACCOUNTS. | | | | funds (must be for investment purposes only); using |
| If you are a part-time or full-time investor or are a | | | | IRA funds purchase collectibles such as artwork, |
| business owner, you have the best chance of | | | | antiques etc. (although certain U.S. minted coins might |
| controlling the size and the timing of your retirement. | | | | be exceptions); purchasing assets owned by yourself |
| The better options are yours if you first establish a | | | | or your spouse with IRA funds; and having your |
| corporation, a limited liability company or a limited | | | | business located in a property owned by your IRA. |
| partnership that you manage. Under improved | | | | PROVIDING FOR ASSET PROTECTION. |
| legislation, the dollar limits on contributions have gone up | | | | Self-Directed IRAs and Solo 401(k) plans can (for |
| and the range of investment choices expanded. So | | | | liability protection) become 'members' of a Limited |
| why pay someone to manage your retirement and | | | | Liability Company ('LLC'). While not required, it is the |
| 'hope for the best' in the stock market when you can | | | | 'smarter way to go' in preserving value and reducing |
| directly control your own retirement destiny? Investing | | | | liability risks - no matter what state you're in. In fact, |
| in assets you know and understand provides a way to | | | | your Self-Directed IRA or Self-Directed Solo 401(k) |
| limit your downside risk and may give you better | | | | can become an LLC member alongside the accounts |
| control of the outcomes. Plus profits in the IRA are | | | | of other co-investors and together combine your IRAs |
| free of capital gains taxes so the total dollar value of | | | | for greater investment results. The LLC Operating |
| your IRA can grow much faster over the years. | | | | Agreement for Self-Directed Retirement Accounts is |
| MORE CHOICES AVAILABLE TODAY. | | | | different than other LLCs and provides a specific |
| With a Self-Directed IRA or Self-Directed 401(k), you | | | | framework in which to operate the Investment LLC as |
| act as your own investment manager. Besides the | | | | your Self-Directed Retirement Account so that |
| usual choices of stocks, bonds, mutual funds, options, | | | | everything is ready for investing at about the same |
| etc. you can now invest in a wider range of | | | | time. |
| non-traditional assets including:o Real Estate Investment | | | | SETTING UP YOUR SELF-DIRECTED PLAN. |
| Propertyo Mortgages and Deeds of Trusto Tax Liens | | | | After months of looking at different providers, I found |
| Certificateso Promissory Notes / Commercial Papero | | | | that for simplicity, ease-of-use and online 24/7 access |
| Private Stock Offeringso Real Estate Lease / | | | | with downloadable forms and instructions, Equity Trust |
| Optionso Limited Liability Companieso Limited | | | | Company (in Ohio) was one of the most helpful |
| Partnershipso Business Equipment Leasingo Structured | | | | Self-Directed IRA or Self-Directed Solo 401(k) Plan |
| Settlementso Mobile Homes Rentalso Foreign | | | | custodians. They are the originators and they will hold |
| Currency Exchangeso Accounts Receivable | | | | your hand as you learn the ropes. There are certainly |
| Factoringo Secured and Unsecured Notes | | | | others who are capable, but I found Equity Trust |
| MAXIMIZING YOUR CONTRIBUTIONS. | | | | Company to be among the most 'user-friendly'. My |
| Today, real estate investors can take full advantage | | | | contact there is Mr. Tim Debronsky, whose e-mail |
| of small business retirement plans. These are just as | | | | address is Tim's direct phone number is (440) |
| easy to set up as the traditional or Roth IRAs but | | | | 323-5491 (ext 329). Early in the conversation ask Tim |
| allow individuals to contribute considerably more than | | | | to send you the 'real estate investor package'. |
| the allowances for those plans. The small business | | | | |