Discover Low Risk IRA Investments And Learn About Investments That Cannot Be Purchased With an IRA
Discover Low Risk IRA Investments And Learn About Investments That Cannot Be Purchased With an IRA
There are a number of IRA permitted investments with better than average earnings potential. Some real estate deals, for example, can be good low risk IRA investments, but most account trustees do not have the expertise required to make them. Here’s a look at what you can and cannot do.
Many people think that the government has a very short list of IRA permitted investments, but that is not actually the case. There are a few activities that are strictly prohibited; buying life insurance, collectibles or antiques and transferring funds overseas, for instance. But the only restriction on real estate is that it must be purchased for investment purposes. In other words, you or your beneficiaries may not live in a residence that is part of your IRA portfolio.
There are other restrictions that prevent your trustee (the broker or banker) from taking advantage of the position and making deals in his or her own interest as opposed to yours. The basic theme of the regulations regarding retirement accounts is that lawmakers want you to make sensible low risk IRA investments, so that your money will be there when you need it.
The other consideration is that assets should be easy to liquidate, in the event the account owner dies suddenly. Thus, real estate which is fairly easy to resell (if you know what you’re doing) is one of the IRA permitted investments, but antiques are not, because it could take a long time to find buyers and an accurate value cannot be easily assigned to them.
So, there are really a lot of things that you can do to grow your retirement account, but your banker may only suggest certificates of deposit as low risk IRA investments. Your broker may only suggest stocks or mutual funds. Real estate investments are often overlooked and that’s a shame, because with the right deal you can see huge returns in a relatively short period of time.
Recently, a man in the DC area was able to significantly increase the balance in his self-directed IRA. He knew that buying property was one of the IRA permitted investments. He found a house that needed some renovations. He was able to negotiate a purchase price of $24,000. After the property was repaired and resold, the tax-free profit for his IRA was $93,500.
Just as a point of comparison, if he had followed the typical bankers advice for low risk IRA investments and put the $24,000 in a certificate of deposit, the value of his IRA would have only increased by about $1600 in two years, which is the amount of time that it took to complete the real estate deal. Now, it’s important to note that he was an experienced real estate investor. He knew how to find the right deal, fix up the property and flip it.
You may not have the knowledge or the time to do the same thing, but with the right help you can add some real estate to your IRA portfolio and improve your chances for a comfortable retirement. A few successful real estate investors have taken on the challenge of helping the average person invest their retirement funds wisely and it’s a good thing. There was a need for guidance concerning IRA permitted investments that offered better return rates than stocks and CDs. Hopefully, this brief overview helped you understand your options.
Adam King is the president of Mosaic Investments, LLC. Mosaic is a real estate company that partners with private individuals and lending corporations nationwide in order to finance and/or rehab investment properties. This is done by using a “turn-key” real estate system Adam King created called the ILOC program. To learn more on how you can obtain high rates of return on your IRA, CD, or other source of private money, visit http://www.ira-and-privatemoney.com now