Aug 31

IRA Mistakes You Should Avoid

Retirement plans have tons of rules and regulations that you must adhere to.  If you don’t, you may be losing out on a ton of savings.  Don’t get caught up by something that you can easily avoid.  Here are just a few examples of mistakes that can trip you up.

Don’t put all your savings into tax-deferred plans.  Take advantage of a Roth IRA to have tax-free withdrawals. Granted, you may be in a lower tax bracket when you retire, but taxes are always on the rise so you might end up paying more in taxes down the road.

Don’t forget to update your beneficiaries.  Things change from the time you set up your retirement plan until you actually retire.  These include marriage, a birth of a child and the passing of a loved one.  Make sure the person you want to inherit your plan really does.

Don’t assume a nonworking spouse can’t contribute.  He or she may not have earned income, but as long as his or her spouse does, he or she may contribute to an IRA.

Don’t take the wrong required minimum distribution.  Once you reach age 70 1/2, the IRS requires you to take minimum distributions.  If you fail to take the right amount, you face a 50% penalty.

These are just some of the common mistakes to avoid, to see more, visit  Better yet, get in touch with one of the tax experts at the IRA Financial Group today.

Aug 29

Investors Using Self-Directed IRAs to Invest in Foreign Real Estate

“We have seen a number of investors looking to use their retirement funds to purchase real estate overseas, in countries such as India, Costa Rica, Panama and Canada,” stated Maria Ritsi, a senior paralegal with the IRA Financial Group. “The self-directed IRA allows IRA holders to use their retirement funds to take advantage of investment opportunities in real estate outside of the United States,” stated Ms. Ritsi.

One major attraction of buying foreign real estate with a self-directed IRA is that one can take advantage of global real estate and foreign currency trends while simultaneously being able to buy assets in a country they know and trust.  Read the full release here.

IRA Financial Group is the market’s leading “checkbook control” Self Directed IRA Facilitator. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group please visit our website at or call 800-472-0646.

Aug 28

Roth IRA Still a Great Option

Roth IRAs are one of the few investment vehicles that can work for anyone.  It doesn’t matter your age or your tax bracket.  Your money will grow tax free and is not subject to required minimum distribution rules.  You don’t need to be working to open a Roth.  Anyone who has a traditional IRA can convert it into a Roth (if you are 70 years of age or older, you cannot convert your RMD).  Read more about this here.

Another thing to consider is opening a Roth for your child.  He or she needs to have earned income to be eligible to contribute.  This includes earning a salary through a job or by doing self-employed work such as babysitting or mowing lawns.  The maximum contribution is $5,000 but he or she can only contribute an amount equal to the earned income.  If he or she earned $2500, that’s the max that can be contributed.

Since your child is just entering the work force, the tax break of a traditional IRA is not necessary this early in life.  Come retirement, withdrawals will be tax-free, a major advantage.  The principal can also be withdrawn at anytime tax-free (though it’s not recommended except in an emergency).  Check out this article for more info.

Contact one of the tax experts at the IRA Financial Group today to set up a Roth IRA for you or your child!

Aug 27

When NOT to Convert to a Roth IRA

Over at, they talk with ChFC Mike Piershale, president of Piershale Financial Group, about who shouldn’t convert his or her Traditional IRA to a Roth IRA.

If you plan on using IRA as income in retirement then don’t convert.  “Converting to a Roth costs money and it takes a certain number of years before the money you pay upfront is justified by the tax savings,” he says. “This timeline is greatly increased if you’re taking income.

If you need to use the funds from your traditional IRA to pay the taxes to convert, why bother?

Another reason not to convert is if you’ll be in a lower tax bracket when you retire.  Why pay 25% now when you can pay 15% when you retire?

Lastly, you’ll be paying the income tax upfront.  “Can you imagine someone has a $300,000 IRA and right upfront they’re giving up $75,000 of that IRA?” he says. “[A Roth IRA conversion may] look good on paper when you’re running a pure math calculation but in the real world, a lot of things happen. They have a health problem or something happens where they need a lot more money a lot faster.”

Your best bet is to talk to a tax expert to see if this is the best course of action for you.  Visit our website today at to get the advice you need.


Aug 24

Self-Employed Retirement Plans

With so much to do already running a small business, the self-employed shouldn’t have to worry about their retirement plans.  Here are a few plans you should consider:

SEP IRA – The Simplified Employee Pension (SEP) is a plan funded by the employer.  The number of employees you have does not matter with a SEP IRA.  This is an inexpensive plan to start and administer.  It has higher contribution limits than a SIMPLE IRA and is very flexible since contributions can vary from year to year.  You must contribute the same amount to your employees as you do for yourself.  Although, there is no catch-up contributions and you cannot take a loan.  This is best for businesses with few (if any employees).

SIMPLE IRA – The Savings Incentive Match Plan for Employees (SIMPLE) is a tax-deferred retirement savings plan for small businesses that the employer must contribute to.  This is another plan that is easy to start and administer.  Contributions are low compared to other plans and participants cannot borrow against the plan.  Again, this is suited for very small businesses who don’t want to contribute a lot and don’t need to take out loans.

Solo 401k – This is like your traditional 401k you can get at a big company, but can only be used by the business owner and his or her spouse.  You can choose a Roth (funded with already-taxed income) or a traditional (funded with pre-tax income) plan.  This is a very flexible option with higher contribution limits.  You may take a loan out if needs be.  This option is a bit more costly and more difficult to open and administer.  This is the best option for a sole proprietor.

If you’re self-employed, it’s best to talk to an expert when setting up your retirement plan.  Contact one of our tax experts at 1.800.IRA.0646 or visit our website at

Aug 21

IRA Contributions Rise Almost 15%

According to a Fidelity analysis, contributions to their IRAs grew nearly 15% between 2007 and 2011.  The average contribution was $3930 in 2011, compared to $3420 five years ago.  There were double digit increases across all age groups.  Moreover, Roth IRA conversions continue to be twice that of 2009 – before income limits were removed.

“The historic market conditions over the last several years have jump-started many investors to take control of their personal economy and increasingly focus on saving for their retirement,” said Ken Hevert, vice president, Fidelity Investments. “These strong contribution rate increases also show more investors are leveraging the power of tax-advantaged vehicles like IRAs to achieve their retirement goals.”

Other findings from their analysis:  Roth IRA contributions passed Traditional IRA ones by 62.7%.  Investors in their 60’s contributed the most.  For those in their 50’s, Traditional IRAs were the trend because of income limits in Roth plans.  Over 80% of young people’s contributions were made into Roths.  The same is true for those over 70.

To read more on this story, check out  To set up your own Roth or Self-Directed IRA, contact a tax expert at the IRA Financial Group today.

Aug 14

Important Retirement Deadlines

IRAs have numerous deadlines that people need to be aware of,” said Jeffrey Levine, an IRA technical consultant with Ed Slott and Co. “Most of the time, missing a key deadline is an irrevocable and irreparable mistake. Even in the rare cases when a deadline mistake can be fixed, the solution tends to be costly and time consuming.”

September 30 – This is the cash out date for someone who has inherited an IRA from someone who has passed away in 2011.  Those who are paid off by this date will not be considered when calculating required minimum distributions.  This is especially important when one of multiple beneficiaries is older or a “nonperson” such as a charity.

October 1 – A SIMPLE IRA must be established no later than October 1st.

October 15 – The last day to re-characterize a Roth IRA conversion.  “The re characterization provision is one of the biggest benefits in the entire Tax Code, allowing someone to completely undo a Roth conversion, for any reason, and get back the taxes that were paid,” said Levine. “Anyone who made a 2011 conversion should make sure to review it as we near the deadline to see if the conversion is still the right move for them.”   The 15th is also the last day to remove excess IRA contributions or be penalized.

December 31 – The last day of the year is the most important deadline of course.  You must take your Required Minimum Distribution if you’re aged 70 1/2 or older.  Also, the President Bush-era tax cuts expire so this is also the date for making a Roth conversion that you would be able to include in your 2012 taxable income, says Ben Norquist, the president and CEO of Convergent Retirement Plan Solutions.  Finally, if you have a Solo 401k, the plan must be established by December 31 to make deductible contributions for 2012.

For more details about these deadlines, check out this article.

With all these deadlines to remember, it’s best if you consult with a tax expert.  Contact the IRA Financial Group today so you don’t miss a deadline!