Use Self Managed IRAs To Gain Tax Benefits And Generate Bigger Retirement Profits

Mike Iredale
October 28, 2008 — 1,696 views  
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Millions of people are seriously concerned about the worldwide financial meltdown happening right now, What do they do with their existing retirement money, and how do they wisely invest to generate a comfortable retirement income in the future.

The bankers and supposed experts don't seem to have too many good ideas and are grasping at straws! One minute America and the rest of the world is in recession and the financial institutions are running out of funds, the next minute some expert gets on TV and says everything will be okay? So where does that leave the average worker who has no real idea of what is going on in the economy and what is likely to happen.

This begs the question how do we invest our money right now? We all know the normal custodians of your retirement funds like bankers, brokers and financial advisors will give you the standard line suggesting you invest in stocks, bonds and mutual funds. Why do they do that? You don't have to be Einstein to figure it out!

It's because they can make more money for less effort. How much time and effort does it take to do an electronic share trade; maximum 10 seconds? The broker gets a nice instant commission immediately he presses the mouse button. Then another mouse click for another 10-second commission when he sells the share regardless of whether your trade is a winner or loser! It can't get any better than that. How many poor bankers and brokers do you see walking the streets?

What about real estate? We all know that the sub prime meltdown was the catalyst for this financial mess we are in now. Certain categories of property have bombed to ridiculous levels dropping hundreds of thousands of dollars. Does that mean that all property investing stinks at the moment? The answer is no! There are good property investments out there if you know where to look and go about it the right way. To be fair, stocks have dropped to ridiculous levels also, so there are many buying opportunities. However, with the DOW gyrating hundreds of points either way every day the average stock investor would need to be very brave, and have a lot of capital to jump into the market right now.

You can use a self directed IRA to invest in all the asset classes mentioned, there are only a few exceptions. The strategy of investing in well researched real estate is probably the most attractive, least risky option available at the moment. You are in control of your investments, and there are terrific tax incentives using self managed IRAs. With a regular self directed IRA tax is not deducted from funds put in, but is tax deductible when withdrawn. This gives you the chance to generate more wealth using compounded tax differed money in the account. When you are nearing retirement age you are likely to be on a lower tax bracket, which will reduce your taxable income at that time

A self managed Roth IRA has the same potential investment and compounded tax benefits. It is structured so you pay tax on your money on the way in, but you are not taxed when the money invested and any profits are withdrawn provided you stick by the rules set down by the IRS.

If you're like many employees you've probably thought about setting up a self managed IRA. In today's tough financial environment many people don't know which way to turn regarding their existing 401(k) and traditional IRA savings plans. Think about consulting specialist companies who can show you all the options available, and give you some sound advice on what's best for you considering you current financial position and you future retirement goals.

About the Author

Investing can be intimidating for the novice investor. Selecting a self-directed IRA real estate investment turnkey solution can be one of the best options for inexperienced investors. To learn more visit my website at to find out who can help you get the best results.

Mike Iredale