If you have been holding on to your IRA for a while, there’s a high probability that you have taken a “set it and forget it” approach to investing. But the markets are constantly changing, and because of this fluidity it’s important to stay abreast of financial news relating to your Self-Directed IRA. We have compiled a few news topics that may be of interest to you as you evaluate your retirement account.
The Real Estate Market is Hot
You likely already know that you can invest in real estate if you hold a Self-Directed IRA. There are rules – you will likely have to buy the property with cash and pay for expenses using IRA funds. You also must understand that your IRA – not you – owns the property.
With that having been said, now may be a good time to look into investment properties. It’s currently a seller’s market – cash is king, and houses are figuratively flying off the market. Have you ever dreamed of flipping a home? Now may be a good time to check out what’s in your area and begin your due diligence.
To purchase and flip a home, you will use funds from your IRA, and your IRA alone. You may have difficulty securing a mortgage under your IRA, so buying a home outright is the most feasible option for most investors.
Once you have flipped your home, you may opt to sell. The profit you make from the sale of your home will be directed to your IRA, potentially increasing your savings. The proceeds from the sale do not count toward your contribution limit.
Cryptocurrencies Are Gaining Steam
Over the past decade or so, cryptocurrencies have been growing in popularity among investors. Did you know that crypto is a viable and legal investment that can help you grow your Self-Directed IRA?
Before you invest in cryptocurrency, familiarize yourself with the market. It’s volatile, and you shouldn’t invest more than you’re willing to lose. But if you’re prepared to follow crypto trends and news, currencies like Bitcoin or Ethereum could be a lucrative addition to your portfolio.
We recommend you “practice” investing in cryptocurrency before you sink your teeth into the market. Online fantasy markets and investment simulators are a great way to learn the ropes of the crypto markets and present no financial risk to you. Once you’ve gained familiarity with the currency, speak to your financial advisor about how cryptocurrency may fit into your portfolio.
Education Expenses are Skyrocketing
The educational climate in the United States over the past 18 months has been, in a word, strange. Virtual learning, alternative school environments and a need for advanced equipment have changed the way we pay for school at the university and lower school levels.
Did you know that with a CESA (Coverdell Education Savings Account) you can help fund the education of your children or family members under the age of 30? College or lower school tuition, books and even computers used for school may be covered, and it’s tax-free. A CESA works similarly to a Roth IRA, with the major difference being that the savings are used for educational expenses.
There’s little doubt that education in America has changed, and it’s unclear how those changes will impact your future educational expenses. A self-directed CESA can help protect your loved ones’ educational prospects.