Self-Directed IRAs: What Are Your Retirement Goals?
Before you start investing, it’s important to evaluate your retirement goals. If you’re young, in your 20s and 30s, this might seem like a strange proposition. After all, retirement is so far away that you don’t really even want to think about it. But it’s during these financially formative years that you set the course that will last you a lifetime—and, if you handle investing the right way, will have compound interest working for you to help you retire wealthy. So how do your goals line up with how you use Self-Directed IRAs?
To evaluate just that, we’re going to take a look at some of the most common retirement goals and see if your current strategies are in alignment with these goals. If not, it might be the time to look at your retirement strategy and see if it needs adjusting.
First Goal for Your Self-Directed IRAs: Security for Your Family
Most people aren’t selfish. They don’t want to hoard a lot of money in their retirement accounts so that they can swim around their gold like “Scrooge McDuck.” They just want to have a comfortable retirement and rely on their own income to take care of themselves when they’re older. And even greater: they want to leave something behind for their family as well.
These are noble goals, but having noble goals doesn’t remove the need for handling the nitty-gritty details of investment. If you want to leave some security for your family, you’re going to need to start investing early – and that usually means looking at a 401(k) in your employment situation to start contributing larger amounts. Roth IRAs are interesting vehicles, as well, as they help you escape some of the tax issues with investing…but they have lower investment limits, which is another variable to consider.
The Goal of Maximum Growth
If your goal for retirement is to retire with as much money as possible, then you’re going to have a different set of priorities. Your end-result of leaving money behind for your family might be the same, but the way you achieve it might be different. You’ll want to look at Self-Directed IRAs for the purpose of real estate investing, for example, because with this kind of investment you can utilize leverage in the form of non-recourse loans. Using real estate as an investment is a great way to maximize the investment for your dollar, which is important for many people with lower incomes who are still interested in getting the most out of their retirement.
The Goal of Diversification
Some people are concerned so much about the economy that they want to be protected in case things really get bad—as we saw in 2008. It’s important, then, to diversify your portfolio using Self-Directed IRAs. You’ll want to explore a wider range of asset classes including real estate, precious metals, private equity, and the like. You can find a full list of available Self-Directed IRA investment options here at our website.
Diversification also helps you to achieve other goals, like financial security and peace of mind, as you’re not as concerned about an economic collapse when you have your money in a broad range of asset classes. A wider net might not always maximize growth, but in many cases it can help to minimize losses, keeping you on track for retirement when one asset class lags.
If you’re interested in learning more about Self-Directed IRAs, continue browsing this website. You’ll find tips and guides for thinking about investing in a new way. You can also get in touch with us by calling us at 828-257-4949. We’ll be glad to talk to you!