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Stock mutual funds tend to be the riskiest type of investment, but also tend to yield the highest earning potential.

Not all stock market investments are created equally. Some funds perform better than others – how will you decide which type of stock fund makes sense for you? Let’s look at the different types.

* Index funds. They tend to mirror the market. They are made up of collections of stocks that basically “match” the market; if the market goes up, the fund goes up accordingly; if the market goes down, the fund goes down at a similar rate. Different funds are intended to “match” different indexes. An S & P 500 index is made up of a combination of all the stocks represented on the S & P 500. Because they automatically provide diversification, index funds have been the safest way to get a steady return on your investment. That assumes, of course, that the future will be similar to the past – and there is no guarantee that will be the case. Continue reading ‘401K – Seven Types of Stock Mutual Funds To Enhance Your Returns’ »

What will your retirement account look like when you reach that age when it will be your only means of living? Well let me tell you, there is a surprising kick of reality when most people consider their final forecast for their retirement savings. In this article, we will compare the three scenarios mentioned in the title, and see how well they will each provide a retirement.

But lets ask a question, first. When you consider the long-term value of your retirement savings, does it look like you will have poor living conditions when you retire, or doe is look like you will be well off? Does it even look like you will be able to retire at all as you have planned?

With the current losses that have been imposed on those having a 401k, it becomes obvious that we need to use other means of securing a nest-egg for our golden years. And there are several options aside from having a 401k. Continue reading ‘How Does Your 401k, IRA, and Certificates of Deposit Compare in Their Value to You?’ »

What’s involved in your 401K rollover when it happens? For the most part, a 401K rollover occurs at the time of retirement or when you change jobs. At that time you may choose to transfer (rollover) your 401K into an IRA. When you partake in this process of transferring your 401K funds from a previous employer into an IRA, then it’s called a ‘401K rollover’.

You can accomplish this by way of a ‘trustee to trustee’ transfer. This moves your 401K from where it is now directly into an IRA. These types of direct rollovers are totally tax-free and you’re not held to any tax liabilities. You also have no limit on the amount of cash you can rollover. It’s very important that you choose wisely when making this move from a former employer with your money, as this usually involves quite a substantial amount for most people. Continue reading ‘What’s Involved in a 401k Rollover’ »

Choosing to rollover 401K funds is a big decision. These rollovers are nothing more than ‘transfers’ of your money that is in a 401K retirement plan that exists with your employer. Should you change jobs, then you have some options to consider about just what is going to be the best move for you to make with your investment. Do you roll it over into an IRA? Do you take it out in cash? Just what is going to be the wisest choice for you? The important thing is that you follow the 401k withdrawal rules.

You may choose to make a trustee to trustee transfer that will move your 401K from the place it resides now straight into an IRA account. When you choose this option, you get the benefit of not being held liable for any taxes. You also don’t have any type of limits on the amounts of cash that you can move. This can be a very important decision, because for the most part this type of move involves a very substantial amount of cash. Continue reading ‘401k Withdrawal Rules – Should You Rollover 401k Funds?’ »

After retirement, you’re likely to have money stored away in various accounts. For a while, you’ll be able to leave it untouched, but after age seventy and a half, you must start taking money from them. This is known as required minimum distribution, or RMD, and it’s important you know what these factors are.

Note that these laws don’t go into place the moment you turn seventy and a half. Rather, they’ll state that you must start taking the payments on the April 1st immediately after you reach that age, with the contract value from December 31. Then, you must take all distributions by the end of the year. Continue reading ‘Just What is Required Minimum Distribution (RMD)?’ »

People put money into retirement accounts for various reasons. Generally, that money just sits there, but at some point they must start taking a required minimum distribution, or RMD, each year. This policy goes into place when they reach the age of seventy and a half, and can be somewhat confusing.

For one thing, the date in which the payments must start being taken is April 1st following the time they reach the mentioned age. To determine just what the RMD payment is, they must look at the contract value from December 31 of that year. This is the same figure they must examine every year thereafter.

To make matters worse, many people are more familiar with a different set of options. This is because the U. S. Treasury, in 2002, changed the system so that the required minimum distribution were lower, helping out your heirs and allowing you to plan in terms of your life expectancy. Continue reading ‘Discovering Required Minimum Distribution (RMD)’ »

If you have a trustee for your IRA retirement account, be aware that many of them will not act as the trustee if there are unconventional investments involved. This includes self directed IRA for real estate. In this case, the IRA account owner will have to find their own trustee that will provide the services needed. It is possible to find a trustee online, but you should start by asking your CPA to see if there is someone they recommend. If you do look online, begin by searching for “self-directed IRAs.” This search will return a list of qualified trustees that can handle you account and any unconventional investments. Nonbank organizations are approved by the IRS and can act as a trustee for your account. Trustees that do handle real estate investments will also oversee all other investments, including stocks, mutual funds and bond. The fact that they also deal with real estate gives them an edge when competing for business. Most often, trustees will not handle an account that involves any unorthodox investments.

When you locate a trustee, consult with your CPA before taking any further steps. In addition to advising you on what is the best IRA, your CPA can perform a credibility check which will determine if your selected trustee is professional and financially stable. It is very important to have the right trustee handling your investments. The wrong trustee can place all of your assets at risk. Continue reading ‘IRA Investments – Trustee, Self-directed IRA & Self-Dealing’ »

Advanced Allowable IRA Investments

Statistics have revealed that at the end of 2001, 42% of U.S. households had an IRA account. The total value of these accounts was $2.4 trillion. The wealth from these Traditional IRA accounts constituted almost half of all financial assets for the households involved. Due to the downfall of the economy and the poor results of the stock market over the past few years, $5 trillion has been lost. Much of this money was retirement money that was in Traditional IRA accounts. Now, IRA owners are desperately searching for other means of investing their IRA funds. By investing in other options besides typical stocks, bonds and mutual funds, these individuals have managed to begin building their retirement plans again because making money through any investment vehicle is the purpose of any Roth IRA.

Is Real Estate in your IRA the Solution?

Real estate is one of those possible investments. The Roth IRA rules and simple IRA rules regarding investments in real estate are complex, but the rewards from such investments can be huge. Many people have the wrong concept of their IRA retirement account. They believe these accounts must be offered by an insurance company, a bank or a brokerage house. This is not true. While the IRA does require a large institution to act as a trustee, it should be remembered that the IRA itself is merely a trust that is given tax benefits. These tax benefits are available as long as the trust contains provisions. So, basically, an IRA is nothing more than a trust that must conform to certain conditions. Continue reading ‘IRA Investment – Investing IRA Options’ »

IRA Investments like a Trust

Since we now know that an IRA can do just about anything a trust can do, you should be aware of the specifics that are allowed. Just as a trust, your IRA can be a form of loan money. You are allowed to borrow from the account for loan purposes. This is usually done when the owner of the IRA account is buying a home for the first time. A loan can be taken to pay for medical expenses as well. With your IRA, you can purchase real estate with no money down. You are also allowed to buy options on real estate. On the flip side, you can sell the options and the property that was purchased. There are many avenues you can take when investing in real estate using the funds from an IRA account.

Options with IRA Investments

If you have decided to avoid IRA real estate investing with your funds, there are many other roads you can travel. IRA funds can be used to start a business. This is great news for those who have been able to save a good amount of money in their IRA account. Many people have dreamed of owning their own business, but they seldom have the start-up money to do so. This is where your IRA could be a huge benefit. Continue reading ‘IRA Trust – IRA Investments & Funds’ »

IRA Investing: The Dos and Don’ts

Anyone who starts a Roth IRA and invests in an IRA will find that they have hundreds of options that are available including even a precious metal IRA. Investment choices include investing in stocks, mutual funds, bonds, derivatives, gold coins and real estate. Most people have a financial advisor who will advise them what is the best IRA and where to invest their money. It may be difficult to make these investment decisions, especially if the investor wishes to hold the investment in an IRA retirement account. Regardless of the available choices to the client, the CPA should be aware of all possible investments.

Since traditional IRA account investments are the most common, all CPAs are aware of these. The question is whether they are aware of investments that are outside of the country or involve real estate. Your CPA will need to know if these are viable investments for an IRA and whether they can be made legally. There are many of these types of questions that are not answered. There is plenty of information regarding distribution limits and deduction limits, but other issues are seldom addressed. Continue reading ‘IRA Investing – The Rules’ »

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