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Self-Directed IRA and 401K

Accounts - Arrangements

A Self-Directed IRA or 401K Arrangement or Account allows the account holder to have complete control over investment decisions and investments subject to certain IRS requirements. It allows the investor to invest in any of the following investments:

IRS regulations require that either a qualified custodian or trustee hold the assets on behalf of the IRA owner. This requirement exists for all self-directed and non-self-directed retirement plans.

Certain types of investments are prohibited as IRA and 401K investments. These prohibited investments include:

With the great tax advantages provided by IRAs and 401Ks, and the wide range of possible investments, it is possible to build wealth and secure your future faster than through other methods of investing. Most importantly, Self-Directed IRA and 401K Accounts are protected from creditors even in bankruptcy.

There are many large, qualified custodians and trustees available to assist investors in rolling over existing IRA and 401K Accounts into Self-Directed Accounts.

Investors should be aware that custodians and trustees of self-directed IRA and 401k accounts generally do not have a duty to evaluate the quality or legitimacy of an investment that is being offered. In fact, self-directed custodians and the trustees nearly always state in their agreements that they have no responsibility for the performance or any investment. Therefore, as with all investments, investors should conduct their own evaluations of the merits of investments being offered before investing.

Self-Directed IRAs

Frequently Asked Questions

Q. Who holds the money or other assets of a Self - Directed IRA account?
A. Cash, the title to real estate, and all other assets of the IRA account are held by a trustee or custodian. Trustees and custodians must be a bank, federally insured credit union, savings and loan association, or entity approved by the Internal Revenue Service to act as a trustee or custodian.
Q. Is it possible to have more than one IRA account?
A. Yes.
Q. How does a Self- Directed IRA account with an independent administrator differ from the traditional IRA account I have with my bank?
A. Banks usually direct your IRA funds into CDs or other accounts that pay a minimum return. While this benefits the bank, it provides a return that is often less than the rate of real inflation. IRAs administered by stock brokerage firms are generally directed into stocks, bonds, and/or mutual funds that are sold by the brokerage firm.
Q. What is the Retirement Industry Trust Association (RITA)?
A. The Retirement Industry Trust Association (RITA) is a professional trade association committed to the growth and expansion of self- directed retirement plan administration. Their goal is to help Americans reach their retirement goals.
Q. Can I purchase a retirement home through a Self- Directed IRA?
A. Yes, but you will be required to rent in out to a third party until you retire, move into the property, and take the required distribution. Many homes in the Coachella Valley and Big Bear Lake area are purchased with Self- Directed IRA funds and then leased.
Q. Can I use my Self- Directed IRA to purchase corporate notes and bonds?
A. Absolutely. High quality corporate notes that earn 8% to 10% per annum, tax deferred, can provide a fast and safe means to a comfortable early retirement.
Q. Can I purchase a house through my IRA account?
A. Only if it is a rental property. You may not use an IRA to acquire a personal residence.
Q. Is it permissible to use IRA funds to purchase a limited partnership interest in a mortgage pool or other private investment fund?
A. Yes.

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