3 Reasons Why IRA Upkeep is Important

Umbrellas | Blog | Mountai West IRA
1.Required Minimum Distributions
If you are age 70½ or older. it is required for you to take minimum distributions (RMDs) from your IRA. You need to take your RMD before December 31 each year. The one exception is for first year that minimum distributions are required, in which you have the option of waiting until April 1 of the following year. Keep in mind that utilizing that option means that you will have to take two distributions in that year, which may shift you into a higher tax bracket. The penalty for failing to take your RMD is a 50% tax on the amount you were required to take, in addition to income tax.

2. Fair Market Valuation
Assets that are held in your IRA must be valued every year for the IRS. The value of a publicly traded stock is much easier to attain than calculating the FMV of an alternative asset which can be more challenging. It is important that any IRA holder with a self-directed IRA or 401(k) plan which owns alternative assets, such as real estate, acquire an independent valuation of the asset. This could be in the form of acquiring an independent valuation from a professional or expert in that market, or even something as simple as tax assessment records from the county or state. This is particularly important if you are over the age of 70 ½, and are subject to the IRS’s required minimum distribution rules. If you will be taking the asset as an in-kind taxable distribution as the value of the IRA asset(s) has a direct correlation to the amount of tax you will pay. If the value of that asset is wrong, you could potentially be charged penalties for under-reporting your income, or you could be paying more tax than required.

3. Estate planning
Calculating your plan contributions is important, everyone wants to be able to retire at some point in their life. Most would like to live comfortably at an earlier age. In order to retire comfortably you will need to calculate the amount and how often these contributions are required for you to retire. Creating a budget for your future is essential, not only for you, but your beneficiaries. It is recommended that you always designate your IRA beneficiaries. The foremost reason for naming beneficiaries is to avoid probate. Probate is the long and often expensive process of reviewing your estate and assets to determine proper distribution upon your death. Making sure your beneficiaries are exactly who you want them to be is very important because your named beneficiaries override any distribution requests you may make in a will.

3 Benefits to Purchasing Real Estate in Your IRA

Estate | Blog | Mountain West IRA
To fully maximize your investment options, you need to have a retirement plan that allows you to select your own investments. A truly self-directed retirement plan allows you the freedom to invest in many types of assets. By investing in real estate, you are able to diversify your portfolio maximizing your potential investment goals.

1. Build or buy your dream home potentially tax free or tax deferred.

Your IRA can purchase your dream retirement property. With this asset you may attain rental income that is tax-free or tax-deferred to pay the initial cost of the home. Then, when you are ready to move into your dream retirement house you may distribute without penalty at age 59½ (or 5 years in a Roth IRA) any property from your IRA as a normal distribution.

2. Leverage your funds with non-recourse loans. Diversifying your investments.

If your IRA does not have enough money to pay for the entire purchase on its own, you may finance or leverage any income producing property. The property is used as the collateral for the loan. Because the property belongs to the IRA, the debt must be repaid from assets within the IRA, whether income from the property, permissible contributions, or other assets income in your IRA.

3. Attaining long term wealth through rental income.

Rental income can pay for the initial cost or the mortgage of the property. As well as any other expenses this property incurs. For example: The property management company expenses, upgrades inside and outside the property, and maintenance. You will never have to pay for these expenditures out of pocket. Any extra income grows tax-deferred, and will potentially be tax-free if utilizing a Roth IRA or be used to supplement any other investments.

3 Crazy Investments Ideas

3 Crazy Investments Ideas | Blog | Mountain West IRA
Crazy Investments

Self-directed IRAs can become The Ultimate Retirement Machine, the IRS only provided rules on what you cannot invest in which leaves endless options for savvy investors. A truly self-directed retirement plan allows you the freedom to invest in what you know and understand. The retirement industry has been dominated by large transaction-driven custodians who have focused on a narrow universe of low return on investment choices. Accounts controlled by financial advisors, with low yielding returns may be right for some, they will never offer the kind of freedom that a Mountain West IRA Self-Directed retirement plan can offer.

We are sharing only 3 of the many of the well thought out and contradicted crazy IRA investment opportunities that our clients have inside of their IRAs. These investment opportunities that would baffle most.

Investment: Fishing License in Alaska
How is this profitable? Our client leases the contract lists, a percentage of the profits of the catch go right into his IRA

Investment: Airplane
How is this profitable? A pilot can lease the airplane from our client, all profits of the lease go directly the IRA

Investment: Cattle
How is this profitable? Let’s talk about Cowpital Gains and Bovidends?. Imagine having the ability to earn 100% Cowpital Gain on your investment. This is what our client earns by investing what he knows best!

Your Financial Advisor will tell you that only stocks, CDs, and mutual funds are allowed in your retirement account, however this is a common misconception. The truth is, broader investment options have been available to the public since the inception of the IRA in 1975. Neither the IRS nor the Department of Labor has ever published a list of legal investments; however, there is a list of Prohibited Transactions and Disqualified Persons that deal with what is not permitted. Almost any investment is permitted provided you follow the IRA provided rules.

Join us on our webinar to learn more about all these crazy investments plus more: JOIN WEBINAR HERE!

6 Things Financial Planners Tell Their Friends

Every wonder what tips a financial advisor gives to his/her friends? We all want to make sure we’re making the right decisions, especially when it comes to money. In this post, we’ll go in depth into 6 tips that financial advisors give their personal friends.

1. Have a budget.

Despite the amount of money you get, you should have a budget of all your expenses, savings and investments. It is easy to carelessly spend your money without a budget, however, when you have a budget, you’ll be able to balance your spending, savings, and investment. Write down all your intended expenses, and don’t spend beyond your budget; having discipline over your money is necessary and beneficial both now and in the future.

2. Invest/save for your retirement days.

Your financial planning friend will always remind you to set aside some portion of your income for the sake of your future. This could be through signing up for life insurance benefits or save it for other investment ventures such as real estate. The subject matter also involves investing in educating your children so that they would take care of you in your old age.

3. Spare some money for fun and relaxation.

A financial planner will always tell you that it is not healthy to work 365 days a year without relaxation and fun. Since you work so hard for your money, you also have the right to enjoy and rest. However, money for fun should also be included in the budget – this helps in avoiding too much spending while out for fun with your family and friends, hence confining you to the budget.

4. Plan before you spend.

It is easy to spend the money you have at hand. All you need is to plan how you’ll use the money for you to fulfill all your needs; otherwise, some of them will be left unfulfilled.

5. Make smart choices when it comes to insurance.

The most important insurance that you should never ignore is the life and disability insurance. Most people assume that they will always have the ability to look for a living. In case you become sick, you’ll be able to receive this savings and benefits from the insurance company you signed up for.

6. Be updated with the benefits offered by your employer.

Always stay alert for any benefits that your employer sets aside; this may be health benefits or incentives for subscribing to a given insurance scheme. Many insurance companies partner with companies to offer friendly services to their employees; always be aware of such offers, they’re usually more beneficial to you.

These tips can certainly help anyone with their financial planning, but it’s also important that you do seek and receive advice from a financial planner. A financial advisor in Florida can go beyond these tips and review your exact situation to make precise suggestions on what you need to do.

8 Financial Tips Advisors Wish You Knew

Introduction

Financial discipline is a critical subject in that recklessness in spending money may lead to bankruptcy alongside other financial-related problems. That’s why it is very necessary for all to acquaint themselves with general tips to ensure sound financial management.

The gist of the discussions below is to explore some common yet critical financial management tips that any competent financial advisory service company may want you to know.

8 Financial Tips Advisors Wish You Knew

Tip #1 Whatever you Earn, Spend Less

Debt, though may often be necessary for the short run, is not sustainable in the long run. That’s why you are strongly advised to shun debt as much as possible and only contract it if and only if you have to. To do so requires you to adjust your lifestyle extensively, avoid too many luxuries, and draw a clear line between your wants and needs.

Tip #2 Draft and Adhere to a Budget

A budget is a plan of expenditure. To keep off debt and unnecessary expenses, it is imperative that you develop a budget that shall guide you in spending your money and stick to it faithfully.

Tip #3 Enroll in and Contribute to a Retirement Plan

Immediately when you start earning you need to enroll in and to start contributing to a retirement plan. This is the only sure way to safeguard your financial future once you exit the labor force. Company-sponsored retirement plans are a nice way to start off. In case the company you are working for lacks an employee retirement plan, you may consider enrolling in an individual retirement plan of your choice but which is more likely to give you the same level of satisfaction.

Tip #4 Develop a Saving Plan

Apart from retirement, saving plans also play significant roles insofar as safeguarding your long-term financial future is concerned. You may consider enrolling in a “Save-as-you-Earn” system if you are not able to afford a fixed deposit saving plan.

Tip #5 Invest Extensively

You may also consider putting some of your money in an investment plan. This could be through the purchase of shares, equities, bonds or treasury bills. In case you have plenty of money at your disposal, you may also wish to explore real estate, restaurant, and retail e.t.c.

Tip #6 Write a Will as Early as Possible

A will is a legal document which stipulates the preferred beneficiaries of a deceased estate. In case you have dependants you may want to write a will as is practically possible to avoid squabbles upon your death.

Tip #7 Familiarize Yourself with the Prevailing Tax Laws

Taxes vary from jurisdiction to jurisdiction and affect various aspects of the typical worker. The failure to remit taxes in time may elicit various penalties from the relevant state organizations. It is therefore of utmost importance that you familiarize yourself with the various taxes that may likely affect you as well as when to pay them and the likely penalties for not remitting them in time.

Tip #8 Familiarize Yourself with the Insurance Coverage

Just like taxes, insurance coverage also exists in various shapes and forms, vary from jurisdiction to jurisdiction, and affect various aspects of the typical worker’s life. It is also necessary to familiarize yourself with them and to know when to remit them.

Final Verdict

Even though the aforementioned tips are self-explanatory, the real life situations are often way too complicated to navigate along. That’s why the intervention of a competent financial advisory service provider such as the financial advisor in Florida may be necessary.

7 Facts to Consider About Retirement Planning

Retirement planning is a greatly advanced process, and we unequivocally urge retirees not to endeavor through it alone. Notwithstanding the danger of outlasting your advantages, you have other cash predators to avoid, like taxes, expansion, stock market and loan fee unpredictability, human services, government disability, and much more. These are seven facts to consider about retirement planning.

1. Growth Potential

It’s safe to state you need your cash to develop. However, the genuine motivation behind why you need your advantages for development is not to wind up well off, but rather to guarantee that you can keep pace with things like expansion, taxes, arranged out of date quality, innovation changes, rising healthcare costs, and so forth. If you need your income to keep pace with expansion, then you ought to request an all-around diversified portfolio to keep pace with your changing lifestyle over the long run.

2. Safety Provisions

The two greatest monetary feelings of trepidation most investors and retirees face are losing cash and coming up short on cash. These feelings of dread are reasonable, as well as the most basic! We generally tell our customers that 90% of our occupation is dodging huge misfortunes. If you are taking income from your retirement resources and endure significant misfortunes in your portfolio, it can be annihilating… and furthermore they drastically increment the probabilities of coming up short on cash. In this manner, each customer ought to request a retirement plan that contains clear systems to appropriately protect you against expansive venture misfortunes and outlasting your income.

3. Tax Efficiencies

A fruitful retirement plan ought to involve two pieces. In the first place, your cash ought to develop with as meager (or no) tax outcomes as could reasonably be expected. Second, your income ought to be gotten in the most tax-proficient way that is lawfully conceivable. In all actuality, we can’t beat the phenomenal rival (the IRS). However, our occupation as money-related professionals is to fill in as ace experts in helping our customers maintain a strategic distance from pointless taxation.

4. Income Growth Potential

Altogether for your income to develop, your advantages must develop at a rate that surpasses your withdrawal rate. This implies, as much as some of you would prefer not to hear this, putting a segment of your money in the stock market which assumes an indispensable part in your retirement plan.

5. Maintain Control

A fruitful retirement plan ought to ensure that you have the income you require, as well as never run out. In past times, this had to be refined through an annuity. The enormous drawbacks to these “old school” annuities were that you would surrender the two most imperative things: control and access to your cash. In other words, an annuity would pay you a settled income forever, but you would no longer have admittance or control to these monies. Impossible!

6. Full Transfer to Beneficiaries

Another normal topic we get notifications of from our resigned customers is the significance of leaving a legacy. At an absolute minimum, each retirement plan ought to request that there is an arrangement set up to guarantee that whatever cash you don’t spend will effectively pass on to your kids, family, and friends, or foundations.

7. Professional Supervision

Retirement ought to be one major excursion, where you get the chance to appreciate everything you adore, like traveling, eating out, purchasing pleasant things, gifting or going through cash with our families, donating, and so on. The exact opposite thing you ought to concentrate on in retirement is stressing over your cash and your budgetary arrangement. In this critical part of our lives, there are professionals out there who are energetic about dealing with you. In this manner, you ought to request to make the most of your retirement, and leave the stresses over your accounts to the professionals.

To sum up, here is our solid proposal: use these facts as a test to put your current money-related professional under serious scrutiny. It is precisely what our financial advisers in Idaho noted from our retirement arranges, and truly, they ought not to consider working with us if we can’t give this to them. We think you’ll concur that these inheritances are basic, as well as they truly aren’t “asking too much.”

Reasons People are Delaying Retirement

Not everyone is excited about the prospect of retirement. Some people feel like they are not quite ready financially, or they just will not know what to do with their free time when they retire. Here are three reasons people are delaying their retirement:

  1. Nest Egg Growth

Once the children leave the nest completely, investors generally have more money to put toward their retirement accounts. Some of these investors might want to take advantage of the extra cash flow and continue to contribute to a retirement account past age 62, the average retirement age in the United States. Traditional IRAs allow investors to contribute until they are 70 ½ years of age, giving them an extra 8 ½ years of investing and nest egg growth. With a Roth IRA, investors can continue to contribute even after the age of 70 ½. Making a contribution in any retirement account will require 1099 or W2 income, however it can be 100% of earned income.

  1. Shorter Retirement

Those who are concerned about the size of their nest egg also take into consideration the possible number of years they will need to finance without a steady income stream. Fewer years in retirement means they have less concerns about making the money stretch and can afford to take trips or support their current lifestyle.

  1. Health Insurance

Employees who are lucky enough to have health insurance provided through their employer might be reluctant to give that up for an individual policy. However, with a Health Savings Account this does not have to be an issue. Contributing to an HSA can lower the stress of health costs during retirement. Visit the Mountain West IRA website to learn more about qualifying for a Health Savings Account.

Age of retirement varies for each individual and can have its benefits whether you want to delay it a little bit longer or get started now.  Taking advantage of a self-directed IRA can be beneficial no matter which route you choose. Talk to a professional at Mountain West IRA today to find out more about the accounts, investment options, and the benefits of self-directed IRAs.