Checkbook Control IRA - Control Your Investment Future
In the last article we pointed out the importance of diversification to achieving your retirement goals. That is why a checkbook control IRA We examined the fact that the stock market (as measured by the S&P 500 Index) has gone literally nowhere from June 28, 2001 to July 15, 2005 while many real estate investors have seen their portfolios double or triple in value. We learned that the only way to truly diversify your retirement plan was to self-direct your investments. In this article and the next we will demonstrate how to use your self-directed account to obtain real control over your retirement plan.
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In recent years investors suffered through management and accounting scandals like Enron, WorldCom, and Tyco, and learned just how little control over their stock market investments they actually possess. However, real estate investors have always enjoyed much more control over their portfolio. More than just a stock certificate or blind faith in a company’s managers, their investments are tangible. They can examine a neighborhood, inspect the condition of a property, negotiate the price and deal structure, choose whether or not to renovate, set their rent, pick their tenants, etc. In other words, they can directly impact the value of their portfolio with the decisions they make, which means they have control.
Through powers granted to it in the 1974 Employee Retirement and Income Security Act (ERISA), your IRA can buy, sell, or exchange real estate. You can rent the property to anyone who is not a disqualified person and you can use the IRA’s cash to renovate or improve the property. If you thought that a multi-family dwelling would make a great investment, but you didn’t have the resources to make the purchase, then we have a solution for you. Put your retirement money to work and use it to make the investment. If you have dreamed of retiring in a special place but could not afford to buy a property now, then purchase the property in your IRA. You can rent it out to an unrelated person and distribute the property to yourself when you retire. These are just some of the possibilities of self-directed real estate investing. This is powerful stuff.
You may also invest in raw land, building lots, apartment buildings, commercial properties, contracts for sale, and other types of real estate opportunities. You can buy a run-down house in a desirable neighborhood, renovate it, and either sell it for profit or rent it with the cash flowing to your IRA. For larger transactions, you can even pool your IRA money with other people’s IRA’s or with other investors. The world of retirement investing just got a lot larger.
Successful retirement investing is about diversification and control. Individuals utilizing the power of self-direction know about these issues and stand to retire with significantly larger nest eggs than those who do not. There are complex rules to follow, and failure to adhere to those rules could mean severe penalties. Further, IRA administrative tasks are daunting. To be successful, it is important to choose a strong team of advisors to guide you through the process and handle your administrative burden. Learn more about self-directed, non-traditional retirement investing and learn how to grow your wealth.
John Laughlin
President, Security Trust Company, Inc.
Article 1 -
Investment
Portfolio Diversification
Article 2 -
Checkbook Control IRA
Article 3
- Self Directed IRA Investment Options
