If you’re over thirty, you probably have an IRA. An incredible concept, fueled by the boomer generation, the whole concept of the IRA was revolutionary for its time – Why work the best years of your life away with the promise of a compensation package, or better yet, a pension, when you could let the eggheads do what they do best and invest your savings in the stock market? Surely, a promised number in your contract must pale in comparison when measured against the potential earnings your dollars could do on Wall Street.
Well, for a few decades, this mentality was not only the norm, but it was justified – The average working man had a 401k or an IRA, and, in some cases, both. If your company knew what it was doing, 10-20% gains every working year were not only the norm, but were all but expected. Enter the economy of recent years – If you held either of these plans, or knew someone who did, odds are the net worth of that retirement package has dropped 40-60%, and is only now beginning to see any trend towards what it once was.
As a result of the recent economic downturn, the trend has been to nix the IRA and keep your money – Not a good idea. Sure, you won’t lose it in the market, but you’re not likely to be saving for your future either. How do you stick it to those who squandered your future? The self directed IRA is the answer. With the collapse of 2008, Congress has decided that the average American might just know more about the markets than he was led to believe.
The same goes for the 401k owner – At its heart, the 401k is a market-based entity. Like it or not, someone is taking your retirement funds and playing the markets – The idea being that you have money to retire on, so long as they can collect a decent sum in the process. You can play the game too – With a solo 401k plan, YOU can choose where your investments go.
Many other options are out there as well; Want to save on taxes? A self directed Roth IRA may be the answer. A REAL gain on your investment? If you’re cunning and able a self directed IRA real estate investment may just be the answer.