The recent downturn in the economy has greatly impacted the retirement plans many account holders. Since the year 1980 many American taxpayers adopted the employer-based retirement accounts because it was easy to manage as mutual funds, its great income potential and its tax advantages. Traditionally fund administrators devoted these funds into the usual investment types such as stocks, bonds and the money market.
Since the crash of the stock market in 1986 and 2010 many of the retirement account owners have seriously considered shifting or doing rollovers to Individual Retirement Arrangements or IRAs. IRA was probably only viewed as a bonus on top of what they expect to receive from social security and their company pension plan when these employees were just starting off. The IRA has become the only way by which taxpayers can save for a retirement in the fashion they had envisioned because of these recent economic developments affecting both the government and business sectors.
An IRA allows taxpayers to have better control over the means by which he can achieve his retirement goals, either as a substitute for or as a supplement to his existing pension plan. Additionally, it increases the control of the account owner in investing his assets in order to optimize its potential, especially if he owned a self-directed account. Which, in the recent years, many account owners have seen this wisdom of investing in real estate because of its demonstrated stability. In IRA, real estate is an allowed asset that can be held by the account aside from the traditional assets like stocks and bonds.
In an IRA, real estate can afford the account owner to generate income and still enjoy tax privileges. This is what is called a real estate IRA. Self directed IRA accounts even provide more flexibility because an account owner can make investments in behalf of the account. In having a custodian who specializes in real estate as well as provides other services for your IRA, real estate investment can prove to be even more satisfying. In this manner, you can be rid of chore normally associated with the management of real estate such as rental collection and maintenance.
It would not matter whether you have a traditional IRA or a Roth IRA, real estate investments can help you generate income for your account with tax benefits. In the former, your tax benefit would be in the way of paying only regular income taxes on qualified withdrawals from your account aside from tax-free contributions. And come retirement time your account would have included all income generated by your asset investments. In a Roth IRA, real estate investments make continuous income until such time as you retire; then you are eligible for qualified withdrawals – tax-free. You are looking at a considerable amount of income here because income can either be derived by leasing out the property or by capital gains if you resell it.
You will be able to save for your retirement and make the money grow tax-free by investing your funds an IRA. Real estate affords you the stability to make you realize profits at a steadier pace than you would when investing in traditional investments. By having a self-directed IRA, investing in real estate is totally under your control and could turn out to be even more rewarding.
Gerald McCabe is a leading IRA Real Estate custodian that helps those nearing retirement learn how to invest in real estate notes with their IRA. Visit http://myselfdirectedira.com for the latest IRA Real Estate strategies or call us at 888-683-5228
