Starting and owning your own business is as much a part of the American Dream as owning your own home. Millions of Americans currently have their own business and millions more aspire to.

Unfortunately, just starting your own business and actually succeeding and making sure the business lasts through retirement are not same. Success Magazine recently published tips on how smart owners can avoid hard work without just returns and to finish rich.

A key factor cited by Success Magazine is making sure you pay yourself first through a government-sponsored small business retirement plan.

As author David Bach notes, “Taking advantage of the government’s generous tax breaks for business owners can truly make you rich. Not taking advantage is one of the biggest failings I see. According to a recent survey, some 64 percent of business owners are delaying their retirement because they don’t have enough savings.”

Depending on the plan type, business owners can contribute (and qualify for tax deductions) up to $51,000 each year. Even better, self-directed IRAs and small business retirement plans allow business owners to invest in a full range of asset types such as real estate, private placements, mortgages, and much more, in addition to traditional assets such as stocks, bonds, and mutual funds.

Filed under: Small business plans on July 1st, 2008 | No Comments »

A government-sponsored Health Savings Account (HSA) continues to be one of the best ways to combat skyrocketing healthcare costs. The U.S. Treasury Department recently released a document (Notice 2008-59) with 40 frequently asked questions and answers that provides further guidance on these popular health plans.

An HSA consists of two parts: A health insurance policy to cover large hospital bills and an investment account from which you can withdraw money tax-free for medical care. Contributed funds accumulate with tax-free interest allowing participants to use those funds to pay for any qualified medical expense they choose.

The Treasury Department document covers a wide range of HSA topics including:

• Who is an Eligible Individual;
• Issues related to High Deductible Health Plans;
• Contributions to HSAs;
• Distributions from HSAs; and
• Establishing an HSA.

Just like government-sponsored retirement plans, investments in HSAs can be self-directed in a variety of assets beyond just stocks and bonds, including real estate, tax liens, mortgages, and private placements, among others.

View this exclusive Equity Trust Company webinar on HSAs.

Filed under: HSA on June 27th, 2008 | No Comments »

According to an article from online.wsj.com, investors who miss the deadline when moving retirement savings from one account to another are out of luck.

The government generally allows investors to roll over money from one tax-deferred account to another tax-free, such as moving an IRA from one financial firm to another. However, that must must be done within 60 days. If an investor misses the deadline, they will face an immediate tax along with a 10% penalty (if under 59 1/2).

What’s the best way to avoid harming your nest egg? Keep your hands off the money. According to Ed Slott, an IRA consultant, in the Wall Street Journal article, investors should not withdraw and redeposit the money personally, but should have the fund custodian move it directly to another financial institution (a “trustee-to-trustee” transfer).

Want to move to a self-directed IRA and gain control over your financial future? Equity Trust can help you rollover/transfer to a self-directed IRA without facing penalties. Find out about the success Bill Taylor, an Equity Trust investor, had when he rolled over his wife’s 401(k) plan to a Roth IRA.

For more information about moving your retirement plan to a self-directed IRA, please contact a Retirement Specialist at 1.888.ETC.IRAS (382.4727).

Filed under: Saving for Retirement, Rollover IRAs on June 20th, 2008 | No Comments »

Are you thinking about making a withdrawal from your IRA before turning 59 1/2 but don’t want to face the 10% early withdrawal penalty?

Well if you are buying your first home there is a way around the penalties. According to an article from detnews.com, if you are younger than 59 1/2, you do not have to pay the penalty on up to $10,000 of distributions if you use it to buy, build or rebuild a first home. The $10,000 limit is applied to each spouse separately, so together the penalty-free withdrawal could be as much as $20,000 for a married couple.

Although you still have to pay income tax when you make the withdrawal, the impact is reduced by the deductions allowed to homeowners, such as mortgage interest and taxes.

For more information about making withdrawals, please contact a self-directed Retirement Specialist at 1.888.ETC.IRAS (382.4727).

Filed under: IRA Withdrawals, Managing Your IRA on June 18th, 2008 | No Comments »

Although it may be hard to think about retirement when you’re only in your twenties, it’s something that should be on the top of your “to do” list. According to an article from www.alligator.org, there are several investment strategies you can take advantage of today to secure a comfortable retirement later.

One of the wisest financial moves you can make is to save early. A single dollar invested today at 9% interest (annually) will be $31.40 by the time you retire (assuming it was 40 years from now). Imagine those same returns with $100 or $1,000 invested.

You might want to also consider investing early with an IRA. There is a Traditional IRA (grows tax-deferred) and a Roth IRA (grows tax-free). Money you contribute to an IRA doesn’t cost you anything in income tax.

Lastly, come up with a budget. Cutting out some of your spending won’t hurt you. Have some financial discipline and take advantage of a profitable youth.

For more information about retirement vehicles, please contact a self-directed Retirement Specialist at 1.888.ETC.IRAS (382.4727).

Filed under: Saving for Retirement on June 16th, 2008 | No Comments »

According to an article from marketwatch.com, the Internal Revenue Service (IRS) recently announced that stimulus payments directly deposited to IRAs (traditional and Roth), may be withdrawn tax- and penalty-free.

Although this may sound appealing, you should take precautions and consider your financial situation. Different situations require different actions.

For example, should you withdraw the money to pay off credit card debt? Yes, according to Denise Appleby, chief executive of RetirementDictionary.com. She says in the marketwatch article that although you will lose the benefit of compound earning in your IRA, the adverse effects may be worse if you can’t make your credit card payment on time.

Did you deposit your stimulus payment into a Roth IRA? If you did, make sure you don’t withdraw unless it is absolutely needed. Roth IRA earnings are tax-free if the distribution meets certain requirements. If you withdraw now, you lose the opportunity for tax-free growth - this could be significant if your stimulus payment stays in your Roth for a long time and enjoys a healthy return.

For more information about making withdrawals, please contact a self-directed Retirement Specialist at 1.888.ETC.IRAS (382.4727).

Filed under: Managing Your IRA on June 13th, 2008 | No Comments »

Most likely you have probably switched jobs in the last 10 years. Along with changing jobs comes making the decision on what to do with your 401(k). According to an article from www.fool.com, when you move from an employer don’t just let your 401(k) money sit there - you should consider other options.

These are some things you don’t want to do with your 401(k):

• Cash out your 401(k) money - According to the article, one study showed that 45% of all workers simply cash out their 401(k) when they change jobs. Now why don’t you want to do this? You will owe taxes on the money you withdraw, along with a 10% penalty in most cases. In addition, you will lose the opportunity for your money to compound tax-deferred.
• Not doing anything with your account - If you leave your money with a former employer, you should be aware of fees and other cost that make them relatively expensive.

One smart move is to roll over your 401(k) to an IRA. This opens a huge range of choices. A self-directed IRA allows you to invest in a variety of assets including real estate, tax liens and much more. Plus you can grow your wealth tax-free.

For more information about self-directed IRAs, please contact a self-directed Retirement Specialist at 1.888.ETC.IRAS (382.4727).

Filed under: Saving for Retirement on June 11th, 2008 | No Comments »

If you are looking to start saving for your child’s education early, the best way might include opening a Coverdell Education Savings Account (CESA). According to an article from detnew.com, your newborn would have to work or have earned income to contribute to a Traditional or Roth IRA. With the CESA any individual can contribute to the account (the child, parents or grandparents). The yearly contribution limit is $2,000.

For example, Joe and Sally Smith took full advantage of the CESA’s tax-free qualities. Their first year they used $500 from their account to purchase an option on a real estate property, selling that option later in the year for $12,000 - a profit of $11,500 tax-free! At the end of the year, the $2,000 original contribution plus the $12,000 option sale (minus $500 in investments) had become a total of $13,500.

In just one year the Smiths had already stacked away enough money to put their child through college for one year.

Learn more about the CESA or contact a self-directed Retirement Specialist at 1.888.382.4727.

Filed under: CESA on June 9th, 2008 | No Comments »

Whether we like it or not, according to an article from www.forbes.com, taxes will go up sooner or later and the individuals with higher-income will face a hard hit. Make sure you start preparing now for this tax increase.

The following are some ways to secure your financial future while managing the increasing tax bite:

• Contribute to a Roth IRA, which allows money to grow untaxed and all withdrawals in retirement are tax free. Make the perfect retirement tool for higher taxes.
• Consider a Roth conversion. This involves taking money out of a traditional IRA, declaring taxable income and depositing it in a Roth, where all future growth is tax free. Although taxpayers with gross income below $100,000 only qualify, in 2010 this income limit will end.
• Think again about deferring pay. The prospect of higher rates makes this feature less appealing. Although deferring pay may make sense for someone who is in the top tax bracket now but most likely won’t be when withdrawing cash.

For more information about ways to deal with rising taxes, please contact a self-directed Retirement Specialist at 1.888.ETC.IRAS (382.4727).

Filed under: Saving for Retirement on June 6th, 2008 | No Comments »

According to an article from suntimes.com, “tax diversification” is similar to diversifying your investment but involves spreading out when you pay taxes (pay some now and some while in retirement).

This can be accomplished by dividing retirement funds into two groups - IRAs and 401(k)s (yet to be taxed) and Roth IRAs and Roth 401(k)s (already taxed). The goal is to contribute the most to each of these two groups so you can create your own tax bracket by choosing the account from which you draw income. If you only had to choose from a Traditional IRA or 401(k), then the only way to control income taxes is to reduce distributions, which in turn translates into a reduced lifestyle.

For more information about diversifying your investments, please contact a self-directed Retirement Specialist at 1.888.ETC.IRAS (382.4727).

Filed under: Investment Opportunities on June 4th, 2008 | No Comments »