Individual Retirement Accounts or Arrangements - IRAs

An individual retirement account or arrangement is a savings account that you setup and control.

Individual retirement arrangements are currently allowed for anyone who has received income and has a social security number.

Each year new limits are established for the maximum contributions and the portion that may be deductible, depending upon your tax filing status and your adjusted gross income.

What you can do…

• You can legally purchase real estate, including international properties, tax liens, tax deeds, LLC membership units, partnerships, mortgage notes, businesses, and many other unique investments using your IRA. To find out all of the details, visit www.irs.gov and search for Publication 590. You must use a Trustee that is setup to handle self-directed IRA accounts.
• You can rollover money from a previous qualified retirement plan, such as an old 401(k) plan.

• You can contribute up to a certain amount per year. For 2007 the amount you can contribute is $4,000 if you are younger than 50 and $5,000 if you are 50 or older. For 2008, the amounts are $5,000 and $6,000, respectively.
• You can only contribute as much money as you make. For example, if you only earned $3,000 in 2007, then you can only contribute up to $3,000.

What you can’t do…

• You can’t withdraw your retirement money before age 59.5 or you will incur a 10% penalty. A few exceptions apply, such as qualified education expenses, disabled veterans and Roth IRA contributions.
• You can’t mix your IRA account money with your personal money.
• You can’t use your IRA money to buy, sell, or exchange investments with a disqualified person (e.g., you, your spouse, children, father, mother or anyone listed as a beneficiary).

Roth versus Traditional:

A Roth IRA allows you to set aside retirement money and the earnings will never be taxed. You get the benefits later. A Traditional IRA allows you to take a tax deduction now (see deductibility requirements in Publication 590) and defer paying taxes on the earning until you withdraw the money at a later time (after age 59.5). The decision on which one to use will be up to you and your financial planner or accountant.

How to get started:

1. Contact a Trustee and get your account set up (Roth or Traditional). For a list of trustees and costs, visit this link: Trustees and Custodians. 

2. Fund your account by either rolling over money or funding it with new contributions. It is always a good idea to start out slowly and only move over a portion of your existing IRA or 401(k) money.

3. Select your investment and contact your trustee to have it funded. If you need checkbook control, have your account fund a new manager-based LLC in which you are the manager and your IRA is the owner.

4. Make sure all money flows back and forth into the IRA. Your IRA is NOT you, it is a separate entity.

5. You can help others by being a facilitator and earning a fee.

Real Estate in an IRA?

Beachfront Caribbean Property for sale. Use your IRA and no deposit or payment is due for 30 days.

Learn how you can earn 18% to 240% per year investing in tax foreclosed properties and tax lien certificates using your self directed IRA. For more information, visit Rogue Investor.