{"id":582,"date":"2014-08-09T10:24:38","date_gmt":"2014-08-09T17:24:38","guid":{"rendered":"https:\/\/shellyrobersonrealtor.com\/?p=582"},"modified":"2015-03-25T22:05:58","modified_gmt":"2015-03-26T05:05:58","slug":"how-to-grow-your-nest-egg-by-thinking-outside-the-box","status":"publish","type":"post","link":"https:\/\/shellyrobersonrealtor.com\/how-to-grow-your-nest-egg-by-thinking-outside-the-box\/","title":{"rendered":"How To Grow Your Nest Egg By Thinking Outside The Box"},"content":{"rendered":"

In Your Retirement Quest Put Real Estate Investments In Your IRA And Watch It Grow<\/h2>\n

Over the years I have had many clients ask me if it was possible to put real estate investments inside of their IRAs.\u00a0 The answer is \u201cYes\u201d but the IRA has to be specific and has to not have certain restrictions.\u00a0 Thinking outside the traditional investment box can reap many rewards for you and your family.\u00a0 Here are some IRA basics and some ideas for getting real estate investments inside of your IRA.<\/p>\n

<\/p>\n

Individual Retirement Accounts Have Several Typical Categories<\/strong><\/p>\n

The traditional IRA<\/strong> is the most common wherein an individual can contribute money each tax year and receive a tax deduction for an equal amount of the contribution.\u00a0 The money earned in the IRA is tax-deferred and will be taxed after retirement at a hopefully much lower tax rate than the earner is paying presently.\u00a0 Non-penalized withdrawals are allowed after age 59-1\/2.\u00a0 These traditional IRAs are what many financial institutions and financial advisers are constantly pushing on investors.<\/p>\n

\"IRA\"<\/a><\/p>\n

The Roth IRA<\/strong> is a more creative investment instrument.\u00a0 The Roth allows the individual to contribute money each tax year however the contribution is not tax-deductible.\u00a0 The bonus is that the money earned is tax-free and the withdrawals at retirement are tax-free.\u00a0 There are some restrictions on the amount of money the earner can earn per year, but this vehicle can be very powerful because of its tax-free benefits.<\/p>\n

The SEP IRA<\/strong>, or self-employed IRA is a simplified employee pension that is tied to a company and adopted by business owner for their employees.\u00a0 One benefit of this vehicle is that employees can contribute large amounts of money each tax year.\u00a0 Additionally the funds invested can be used in similar manner as traditional and Roth IRAs.<\/p>\n

The Education IRA<\/strong> allows contributions for children\u2019s education.\u00a0 The contributions and earned income can also be used to purchase a first home.<\/p>\n

The Simple IRA<\/strong> is very similar to a 401K as it is an employer-sponsored plan in which the company can match employee contributions.<\/p>\n

A True Self Directed IRA Is Necessary For Real Estate Investments Within An IRA<\/strong><\/p>\n

The Self Directed IRA<\/strong> is actually all of the IRAs above however most IRAs are dictated by the custodian or company that is servicing them and only allow the investor certain type assets in the IRA.\u00a0 Technically any asset may be placed into an IRA with the exception of insurance and collectibles.\u00a0 Most larger financial institutions limit what you can direct into your IRA.\u00a0 If you want to have real estate in an IRA you will need to employ a truly Independent Self Directed IRA<\/strong> through an independent or \u201cboutique\u201d custodian who will allow non-traditional assets as permitted investments such as real estate, gold, silver, platinum, life settlements, private placements, etc.\u00a0 There are many of these boutique companies servicing IRAs in the marketplace and they can be located and researched fairly easily.\u00a0 During your research you may be surprised to find out all of the ways you can invest in real estate within your IRA.<\/p>\n

\"IRA<\/a><\/p>\n

Costs For Real Estate IRAs<\/strong><\/p>\n

Self-directed IRAs for real estate investment are typically higher than your average run-of-the-mill IRA, but the long-term benefits can be substantially greater.\u00a0 If you have a commercial building, a single-family residence or an apartment building during the last twenty years your IRA would have ballooned much greater than the average stock market return in the typical IRA.\u00a0 However some investments may not have fared so well as with any investment.<\/p>\n

Downfalls For Real Estate IRAs<\/strong><\/p>\n

As with any asset class the investment is subject to ups and downs of the marketplace.\u00a0 Moreover, you will not be able to actively manage the property (and receive compensation) that is within the IRA nor will you be able perform any services or work unless you are not paid for it. \u00a0There are some very specific rules about the management and servicing of property held within an IRA.\u00a0 The best rule of thumb is to allow a professional property management company handle the management affairs for the property.\u00a0 This way you will not run afoul of the IRS restrictions and at the same time allow a professional to help you maximize your return on investment.<\/p>\n

Income Produced In Real Estate IRAs Are Subject To Same Rules<\/strong><\/p>\n

The income produced by the real estate IRA will be subject to the same rules and regulations as any of the other IRAs.\u00a0 You will not be able to use the income prior to you being 59-1\/2.\u00a0 The earned income will be placed into the IRA account and can\u2019t be spent until you reach retirement age. \u00a0The investement property expenses including the fees associated with a professional property manager<\/a> are tax deductible however.<\/p>\n

Investing In REITs Within Your IRA<\/strong><\/p>\n

Another way to invest in real estate within your IRA is to purchase and hold shares of investment grade REITs or real estate investment trusts.\u00a0 REITs are incredibly popular and are available for every type of real estate imaginable.\u00a0 Another benefit of a REIT is that the better positioned ones are well diversified and can hold many different types of building and properties within one investment.<\/p>\n

\"IRA<\/a><\/p>\n

You Should Consider A Real Estate IRA To Diversify<\/strong><\/p>\n

Many people ask me why they should consider a real estate IRA.\u00a0 My answer is simple, diversification.\u00a0 There are many pros and cons and this type of investment may not make sense for everyone for all sorts of reasons.\u00a0 However, it makes absolute sense to look into these, to research these, and to see if they make sense for you.\u00a0 I believe that having a well-diversified portfolio of real estate, stocks, bonds, and other investment assets for your future and retirement is a sound way to approach preparing for the future.\u00a0 I have always believed that owning assets where other people pay off the debt is a great way to prepare for the future.\u00a0 Owning investment real estate whether that asset is a commercial building, an apartment, or a single-family home where other people are investing for you is a sound investment strategy which everyone should look at and seek to employ for themselves and their families.<\/p>\n

If you have questions please don\u2019t hesitate to email me or give me a call.<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

In Your Retirement Quest Put Real Estate Investments In Your IRA And Watch It Grow Over the years I have had many clients ask me if it was possible to put real estate investments inside of their IRAs.\u00a0 The answer is \u201cYes\u201d but the IRA has to be specific and has to not have certain…<\/p>\n","protected":false},"author":5,"featured_media":584,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[12,120,124,17,117,121,116,115,119,118,123,122],"tags":[89,93,94,96,31,97,95],"yoast_head":"\nHow To Grow Your Nest Egg By Thinking Outside The Box - shellyrobersonrealtor.com<\/title>\n<meta name=\"description\" content=\"Think Outside the box and get creative with your real estate investing to grow your retirement nest egg\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/shellyrobersonrealtor.com\/how-to-grow-your-nest-egg-by-thinking-outside-the-box\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How To Grow Your Nest Egg By Thinking Outside The Box - 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