Dodge the Stock Market Stress with These 3 Ways to Invest Your IRA

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JLP Staff

Aging Well /

Savings jars

Between paying for your kids’ (or grandkids) college tuition, buying a new car, and selling your home, you may feel like you’ve spent a good portion of your life planning your finances.

But have you spent much time deciding on how to spend your retirement fund?

The keys to planning a successful retirement fund are to outline your expectations, learn your options, then get informed on the details and how you can optimize the retirement savings you collect.

A good way to approach retirement savings is with a self-directed IRA, or individual retirement plan.

A self-directed IRA puts you in control of where your money goes using alternative investments as opposed to selecting pre-set options which are typically stocks, bonds, and mutual funds.

Not only does it mean freedom from the stressful trial and error process of the stock market, but it also allows you to invest in things you have personal interest and experience in.

Not sure where to start? We’ve collected 3 popular alternative investment options to get your gears turning.

Private Placements

Any small business that’s privately owned qualifies as a private placement.

That includes but isn’t limited to:

  • Hedge funds
  • Limited liability companies
  • Start-up’s
  • Land trusts
  • C corporations
  • Convertible notes

Not only does investing in small business help diversify your investment portfolio, it also allows you to put your money toward things you really care about.

Banks have grown stricter on the kinds of businesses they loan to, so the demand for private investors is growing.

That means you have more options in how your money will be invested, and a better chance at choosing a business that will reap you great rewards.

With the higher earning potential, however, also comes a few risks. For example, if you experience a loss in income you can’t write it off on your taxes like you can for many other kinds of investments.

In order to avoid a loss or any legal dilemma, be sure to fully research the business you plan to fund, check in on how long you have to wait before withdrawing funds, and obtain any copies of statements, reports, and notices.

Eco Investments

If you find yourself delighting in recycling, composting, and other ways of creating sustainability, you may want to consider eco-investments.

Eco-investments are investments in environmentally friendly endeavors and products. The benefits of these investments go far beyond helping the environment, too.

According to a Harvard Business Review study, companies that commit to environmental responsibility are growing in popularity as well as preparing for future eco-friendly regulations.

That means wishing 20 years, they should be outperforming standard companies.

Some eco-investments to consider are:

Green energy

Green energy is the term for energy generated from natural sources such as water, plants, or sunlight.

Unlike fossil fuels, these energy sources replenish and have a significantly smaller negative impact on the environment. Consider investing in a solar energy company, wind power, or biofuels.

Green bonds

Green bonds, or bonds for sustainable design projects, are issued by federally approved municipalities to help with development.

Typically projects focused on energy efficiency, pollution prevention, and ecosystem prevention are prioritized.

Alternative transportation

You can invest part of your self-directed IRA in ensuring people have access to transportation that can help minimize their carbon footprint such as bike initiative and fuel efficiency vehicles.

Real Estate

If the idea of being a real estate investor has ever appealed to you, now’s your time to shine! You can use a self-directed IRA to invest in real estate properties as long as you don’t intend to live in it.

Some great reasons to consider real estate investment are:

  • Significant tax benefits: You’ll benefit from the tax deferment of your real estate investment until you withdraw your earnings.
  • You get to choose the type of property you invest in.
  • Investing your money in real estate protects it from debt collectors.
  • You can build up a good sized heritage for your children.

Once you’ve chosen a property and informed your IRA custodian, you’ll work together to put together an offer to the seller. Once the offer is approves, you’ll sign all contracts as your IRA so you’ll receive the proper tax benefits.

When the property is obtained, you’ll find tenants  and your custodian will hire a property manager with funds from your IRA. All rent payments will go directly to your IRA.

To sell the property without receiving penalties, you’ll have to wait until after you’re 59.5 years old.

Get Advice

The IRS rules regarding your retirement savings aren’t always easy to navigate. Be sure to consult a trusted advisor about your self-directed IRA investment options before moving forward.

An experienced IRA advisor like Safeguard Advisors can make sure you’re making the most of your retirement portfolio, while staying in-step with IRS rules.

By planning carefully, budgeting, and choosing a cause to invest in that you care about, you’ll be surprised at the benefits a self-directed IRA can reap.

If you’re still working on having a feasible amount of savings to put into an IRA, take a peek at these apps that will help you start saving for retirement today >



Categories: Aging Well
About The Author
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Joan Lunden’s in-house research and writing team works with Joan to create content that complements her focuses and the interests of her fans. The team is dedicated to creating a thriving community through content and conversations, and hopes their work, like Joan’s, can make a difference in the lives of her readers everywhere.

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