Nearly Half of 55-Year-Olds Have No Private Retirement Savings in Self-Directed IRAs

When it comes to retirement savings, there really are two Americas: In one America, the average 401(k) balance is bouncing around $100,000, according to research from Fidelity Investments.

In the other America, taxpayers are heading into their retirement years with nothing in savings. Of those aged 55 years and older, nearly half – 48% – had nothing saved in any retirement account to help secure an income for them in retirement. That includes employer-sponsored retirement accounts like 401(k)s as well as individual accounts like IRAs and Roth IRAs, including Self-Directed IRAs.

That’s a modest improvement from 2013, when the figure was 52 percent – but still indicates that younger baby-boomers are woefully unprepared for their retirement years, when many of them will not be able to earn an income through work.

Part of the problem is access: 2 out of 5 workers in this age cohort who do not have savings of their own do not have access to a traditional defined benefit pension plan – in which an employer guarantees them a certain predictable monthly payment based on what they earned in their years of service with the employer – most frequently a government agency, in this day and age, as few private sector employers continue to maintain traditional defined benefit pensions.

This indicates that some of these workers will have at least some pension income to fall back on in retirement. But 29 percent of Americans age 55 and older does not have access to either an employer-sponsored defined benefit plan nor to savings of their own in a 401(k), IRA, Self-Directed IRA or other retirement account.

According to the federal General Accounting Office, the median household retirement savings of those age 65 to 74 had $148,000 saved in 2015 – the last year of data upon which the report was based. This would translate to a conservative annuity income of about $649 per month.

Meanwhile, the Average Social Security benefit in 2019 is about $1,422 per month. Which means the average senior without retirement savings or access to an employer-sponsored pension is looking at retirement income of around $2,000 per month, or $24,000 per year.

If you are behind the 8-ball, what can you do about it?

First, if you have access to an employer 401(k) with a match, contribute at least enough to maximize your employer match. If your employer is matching 25 cents of each dollar you contribute, up to 3 percent of your pay, then contribute 3 percent of your pay. The immediate return of 25% per dollar of contribution up to that threshold is solid in any investment endeavor, and is a worthy use for your next dollar of savings at any time

Second ruthlessly attack credit card debt. With average interest rates of 14.14% for existing accounts and 19.24% for new offers, and average credit card debt per household of $8,292. At the 19.24 rate, that frees up $133 per month in interest charges alone.

The same goes for high-interest, non-deductible consumer debt such as car loans, appliance loans, loans for your bass boat, department store and gas cards, and the like. Zeroing it out will save interest and free up cash flow from debt service to saving and investing. It’s like moving from defense to offense!

Next, try to maximize contributions to Self-Directed IRAs or Roth IRAs. If you want to explore holding IRA assets in non-traditional or alternative asset classes, such as real estate, gold and precious metals, tax liens and certificates, private lending, LLCs or partnerships, call American IRA, LLC at 866-7500-IRA (472).

As of 2019, if you meet certain income requirements, you can contribute up to $6,000 in any combination of traditional and Roth IRAs. If you are age 50 or older, you can contribute an additional $1,000, for a total of $7,000 per year. And if you are married, you can double up, using a Spousal IRA.

Once that’s done, go back and maximize your 401(k) or SIMPLE IRA contributions within your employer’s plan, or open up your own SEP (Simplified employee pension) or Solo 401(k) plan to handle self-employed income or income from your own owner-operated corporation.

Whatever you do, do it with a sense of urgency. You may think you will be working well past age 65, which helps. But many people simply don’t have that option. Business-cycle-related layoffs, restructuring, an increasingly out-of-date skill set and medical problems mean most people are forced out of the work force involuntarily.  

So, if you are among those with little or nothing put away for retirement – at any age, it’s time to take decisive action.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

The Self-Directed IRA Process

Self-Directed IRAs give individual investors the opportunity to take more personal, direct control of their retirement assets. They are IRAs just like any IRA – the difference with a Self-Directed IRA is that instead of delegating investment decisions and execution to a bank, investment company or broker who may not always have your best interests at heart, you are taking the reins and making individual investment selections.

Furthermore, you do not have to settle for the mediocre returns and high liquidity premiums and expense ratios and commissions charged by publicly-traded mutual funds and other securities. Self-Directed IRAs enable you to bypass these companies and their fees while simultaneously affording you the opportunity to diversify into alternative asset classes that most off-the-shelf investment company products cannot or will not help you with.

Naturally, with a Self-Directed IRA, you are going to need to be more involved in the process of selecting and managing most of these investments than you are with conventional IRA investments in stocks, bonds, mutual funds, CDs and annuities. But you are going to have opportunities to find lucrative and diverse opportunities that your broker or Wall Street company advisor is not going to have access to.

The process is straightforward:

  • Open an account with American IRA, LLC. Click here to start the process!
  • Fund your Self-Directed IRA account, either with a rollover from an existing source of retirement funds or with an investment of new money for the current tax year.
  • Identify potential investments and perform due diligence. You will not be paying a fund manager to conduct this process for you. You can engage with your own investment advisor, whom you can select. But with Self-Directed IRAs, the onus for performing due diligence for potential investments is on you.
  • Direct American IRA, LLC to purchase the asset. American IRA provides administration and transaction services for Self-Directed IRAs, as well as Self-Directed 401(K)s, Self-Directed SEP IRAs (Simplified Employee Pension), Self-Directed SIMPLE IRAs, and even Self-Directed CESAs (Coverdell Education Savings Accounts) and Self-Directed HSAs (Health Savings Accounts). Once you have selected the investment, our function is to ensure that your transactions and instructions are handled timely and accurately, and to provide an accurate accounting of what was done.

Note: With Self-Directed IRAs, you are prohibited from handling the asset yourself. The title must not pass through your hands directly. Everything has to be handled by an IRA administration firm such as American IRA, or custodian.

You simply provide us written instructions to purchase the specific asset at a specific price, from a specific individual or entity. It is your responsibility to abide by all laws regarding prohibited transactions and counterparties. Once the closing is completed, the asset is owned in your IRA’s name, not your name, personally.

IMPORTANT: It is vital to keep a strict separation between your personal funds and IRA funds. You cannot intermingle funds, and if you own real estate or any other asset in your IRA you cannot use the assets for your own personal benefit. If you do, you risk having the IRS disallow the entire IRA, incurring a big current year tax hit as well as face some stiff penalties.

  • Manage the Self-Directed IRA. You direct American IRA account owns the assets in the Self-Directed IRA on your behalf. All expenses associated with the asset have to be paid from funds from within the IRA. Additionally, all profits and cash flows generated from within the IRA must be returned to the IRA. You cannot access them directly except by taking a distribution, like with any IRA. If it is a Traditional IRA, 401(K), Self-Directed SEP IRA, Self-Directed SIMPLE IRA, Self-Directed CESA or Self-Directed HSA, this distribution is normally taxable as ordinary income. If it is a Roth account – whether it is an IRA or a 401(K), and the asset has been in the account at least five years, distributions are generally tax-free (though if an IRA asset has been leveraged, you may have an unrelated debt financed income tax liability).

If you need to take a distribution, likewise, you let us know in writing, and we will send you the funds requested, if available in your Self-Directed IRA. At the end of the year, we will generate a 1099 detailing your transactions and forward a copy to the IRS, in accordance with the law.

  • Execute your sell strategy. You monitor your investment for performance and value. When it comes time to sell it, you send American IRA, LLC written instructions to sell the asset to a specific individual at a specific price.

The buyer must write the check out to your Self-Directed IRA, not you, personally, or wire the funds directly to American IRA, LLC. Once funds have been received, we will transfer the asset to the buyer according to your written instructions.

Once you get started, the process is simple and straightforward – and we find that most of our clients actually enjoy the process of investing and the challenge of making financial and investment decisions.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

IRS Announces Higher Self-Directed Contribution Limits for Self-Directed IRAs, 401(K)s

Self-Directed IRA Success Story

Larry (66) and Ethel (62) were both successful real estate investors for years. But did not realize they could leverage their real estate experience and expertise using retirement funds until about 15 years ago, when they discovered investing with Self-Directed IRAs. They had significant assets in a Roth IRA account and were delighted to learn they could roll it over and enjoy tax-free rent income from a portfolio of real estate investments. Over the last 15 years, their real estate profits have exceeded anything they could have expected to earn had they invested in diverse but conventional IRA assets like mutual funds, stocks and funds. They have not needed to tap the income yet, but when they do, a sizeable fraction of their retirement income will be tax free, largely protected from creditors, and have had the benefit of years of tax-free appreciation in the meantime.

Good news: The Internal Revenue Service has increased the amount of allowable contributions to Self-Directed IRAs, Roth’s and other retirement accounts in tax year 2019.

The new contribution limits are as follows:

Traditional IRAs, including Self-Directed IRAs: Increased from $5,500 to $6,000 per year.

Roth IRAs, including Self-Directed Roth IRAs: Increased from $5,500 to $6,000.

The annual catch-up contribution allowance for those ages 50 and older is unchanged, however, remaining at $1,000 for traditional and Roth IRAs, including their self-directed varieties. Unlike the baseline contribution limits for IRAs and Roth IRAs, the catch-up contributions are not subject to an automated cost-of-living adjustment. Any increases in the catch-up limits have to be specifically authorized by Congress.

This news is welcome since the contribution allowances for Self-Directed IRAs have not been increased since 2013.

Likewise, the allowable income limits for deductible IRA contributions and Roth IRA contributions have each increased as well:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $64,000 to $74,000, up from $63,000 to $73,000.
  • For married couples filing jointly, where the spouse making the Self-Directed IRA contribution is covered by a workplace retirement plan, the phase-out range is $103,000 to $123,000, up from $101,000 to $121,000.
  • For a Self-Directed IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000, up from $189,000 and $199,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household for tax year 2019, up from $120,000 to $135,000. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

In all cases, Self-Directed Roth IRA and Self-Directed IRA thresholds and limits are the same as their conventional IRA counterparts.

Contribution limits for employees who participate in a 401(K), 403(b) and most 457 plans, as well as the federal government’s Thrift Savings Plan, are increased from $18,500 to $19,000.

A full list of the IRS’s contribution limit and income threshold allowances is available here.

Increase your contribution limits.

For now, there is nothing you need to do differently. Most planners would recommend maximizing any 401(K) match, eliminating any high-interest debt, building an emergency fund of three to six months’ worth of expenses, and then maximizing available retirement contributions for the current year.

Remember that for IRAs, self-directed or otherwise, Roths and Self-Directed SEP IRAs, you have until April 15th of 2019 to make your contributions for the year – but any contributions to 401(K)s have to be in by the end of the calendar year.

Beginning in January, though, you are clear to increase your monthly Self-Directed IRA contributions to $500 per month, not including the catch-up allowance for those over age 50.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Four Common Retirement Fears – And How Self-Directed IRAs Can Help

Many Americans are feeling insecure about retirement. And it is no wonder. The days of staying with one company for forty-five years and then enjoying a comfortable retirement thanks to a generous pension are no longer the norm. Plus, everyone hears those rumors—true or not—that Social Security might not be around (at least in its present form) when it is their turn to collect from it.  A Self-Directed IRA may be able to help.

Add to those worries an unpredictable stock market and “safe” investments like treasury bills and CDs that do not yield enough to keep up with moderate inflation, and it is easy to understand why there’s little peace of mind for future retirees.

But there is hope for safeguarding your plans for the future. It is called a Self-Directed IRA, and it gives retirement investors more options—private stock, real estate, precious metals, and more—from which to diversify and gain some sense of security.

Take a look at how Self-Directed IRAs can help you and other investors overcome many of those common fears about retirement:

Inflation will devastate my savings

Every one of us has experienced inflation. Here’s an example: Five years ago, you set aside $18,000 in your savings account for your next car. Today, that same car costs $21,000, while your money has “grown” to $18,050! Your dollars are less valuable than they were five years ago, and your savings could not keep up with inflation.

Traditional IRA investments such as stock, bonds, and CDs usually lose money when inflation is high. Conversely, physical assets like real estate and gold will typically maintain their value during inflationary times. Diversifying into these physical assets through a Self-Directed IRA can help you protect your retirement funds from inflation.

The stock market will collapse, and I will lose everything

Many investors still feel the pain of watching their portfolios cut in half during the stock market collapse of 2008. The fear of it happening again is magnified because now they are ten years closer to retirement. And while 2008 was an extreme case, downturns in the market occur regularly, and it is next to impossible to predict how any future corrections will impact your portfolio.

Self-Directed IRAs give you more investment options to expand your portfolio into different asset groups. This diversified investment tactic can protect your investments by reducing risk—some of your assets may decrease in value while others remain stable or increase. That is why it is important to have asset classes that are complimentary. For instance, gold compliments stocks because there is very little correlation between the two. In other words, when stocks are struggling, gold is shining.

I will not have sufficient income in retirement

After you retire, you will be counting on your savings to generate income for you. Many retirees turn to bonds and CDs because they believe these are low-risk alternatives. Unfortunately, they do not produce enough income to keep up with inflation, so these investors end up trading one risk for another.

One investment that’s available with a Self-Directed IRA, real estate, is an excellent option for generating streams of income. Investment properties can be one good option for post-retirement income streams. Investment properties can create a reliable rental income that is typically higher than those you would earn from the low-risk choices. And unlike stocks, you need not be concerned with market volatility.

I have trouble understanding my investments

Stocks, bonds, and other financial assets are complex, and they can be difficult for the average retirement investor to comprehend. Just tune in to one of the financial channels and listen to the experts. Even they cannot agree on which stock is your best investment choice.

Physical assets, like real estate and precious metals, are easier to understand. Everyone has seen, touched, and experienced these during their lifetime. And with a Self-Directed IRA, you can shift some of your funds into these assets to give yourself more confidence in your overall portfolio.

At American IRA, we believe that a diversified Self-Directed IRA is the best vehicle for growing your retirement account. And we have the experience to handle your transactions, no matter which of the various options you choose to utilize.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at

Everything Realtors Need to Know About Self-Directed IRAs

For realtors, there is no doubt about it: the more people are interested in real estate, the better business will be. Yet many realtors do not know that real estate is one of the most popular retirement investments outside of the stock market—especially with those who run their own Self-Directed IRAs. An investor that uses their Self-Directed IRA to purchase real estate still has access to non-recourse loans. And though there are some limits on what an investor can do with real estate using a retirement account, it will only help realtors to know what is possible.

Why It Is Important Realtors Understand Self-Directed IRAs

The concept is simple: there is no reason to ignore one corner of the market where real estate is involved. By using Self-Directed IRAs for real estate investments, retirement investors can put aside wealth in the form of real estate with the tax advantages of any other retirement investment account. That provides additional incentive for any real estate investor looking to build long-term wealth to utilize one of these retirement plans for their own real estate investing purposes.

Self-Directed IRAs also allow individual investors to partner up and make real estate investments that way, there are plenty of options available to those who choose to self-direct. Realtors who know clients who self-direct may be able to bring more opportunities their way, especially when it comes to “investment” real estate that otherwise has difficulty finding enough potential buyers.

Alternative Funding Strategies with Self-Directed IRAs

Realtors who recognize an opportunity when they see it can offer alternative funding ideas to their clients. For example, because a Self-Directed IRA is expected to act as a separate entity from the individual, it is possible for an individual to partner up with themselves to muster the funds necessary—provided that the real estate investment itself still adheres to the rules of Self-Directed IRAs. For example, investors cannot live in the real estate in which they are investing with a Self-Directed IRA, whereas personal real estate purchases can also double as residences. Still, this funding advantage can offer a realtor a tremendous amount of flexibility in fully exploring the market for a given piece of real estate investment property.

Limitations of Self-Directed IRAs and Real Estate

Although it is important to be mindful of these tremendous advantages for investors—even as a realtor—it also pays to know the potential limitations. For example, you would not want to bring the idea of buying a personal home to anyone investing in real estate with a Self-Directed IRA—unless the idea was to go through the usual means, and not through the investment vehicle itself. Self-Directed IRAs can only be used on real estate if those investments are kept separate, as the accounts themselves are considered separate entities.

The good news? It is advantageous for any realtor to know that there are plenty of options—including non-recourse loans—for those who invest with a Self-Directed Real Estate IRA. Knowing these options can grant realtors access to a larger market than they ever thought possible.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Or visit us online at

Best Flipping Markets for a Self-Directed IRA

If you are a property flipper, you already know some areas are better for Self-Directed IRA returns than others. Flipping is the practice of buying real estate, making improvements to unlock value in the property that may have been hidden to the previous owners and to other buyers.

It works well in rising markets, of course, but it is at its heart a market neutral strategy that can provide good results even in flat and falling real estate markets. The reason: Skilled flippers can add value through improvements faster than a falling market can suck value away.

A new survey from the National Association of Realtors lists the top ten markets for real estate flippers. And several of them are right here in the southeast, near many of our Self-Directed IRA clients in or near the Carolinas. And many of these metro markets are at reasonable entry prices. Do not have $758,800 to buy the median-priced home in Los Angeles? Head north to Fresno, or scout out properties in Nashville, New Orleans or Lubbock.

Here are the top 10 most profitable flipping markets this year, according to   If you use a Self-Directed Roth IRA potential profits as stated below by would be tax free forever.

1.)  Nashville, Tennessee

Median home list price: $367,900
Ratio of flips to all home sales: 4.1%
Average flip profit: $87,200

2.)  Fresno, California

Median home list price: $311,700
Ratio of flips to all home sales: 3.5%
Average flip profit: $53,200

3.)  Palm Bay, Florida

Median home list price: $267,600
Ratio of flips to all home sales: 3.3%
Average flip profit: $71,500

4.)  North Port, Florida

Median home list price: $350,000
Ratio of flips to all home sales: 3.3%
Average flip profit: $85,300

5.)  Baton Rouge, Louisiana

Median home list price: $237,800
Ratio of flips to all home sales: 3.2%
Average flip profit: $70,000

6.)  Chattanooga, Tennessee

Median home list price: $257,500
Ratio of flips to all home sales: 3.1%
Average flip profit: $65,800

7.)  Los Angeles, California

Median home list price: $758,800
Ratio of flips to all home sales: 3%
Average flip profit: $169,400

8.)  Lubbock, Texas

Median home list price: $240,000
Ratio of flips to all home sales: 2.7%
Average flip profit: $46,000

9.)  Medford, Oregon

Median home list price: $410,000
Ratio of flips to all home sales: 2.7%
Average flip profit: $51,200

10.) New Orleans, Louisiana

Median home list price: $280,100
Ratio of flips to all home sales: 2.6%
Average flip profit: $93,400

The best thing: When you flip a property within a Self-Directed IRA, you do not have to pay immediate taxes on the profits. As long as the money remains in the account, you can execute an unlimited number of flips each year, and there will be no taxes due, except potentially unrelated debt-financed income tax on the gains or income attributable to money you borrowed to purchase or improve the property.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Or visit us online at

Incorporating Self-Directed IRAs and Self-Directed 401(K)s into Your Retirement Strategy

Throw around phrases like IRAs and 401(K)s and people will start to feel their eyes glaze over. Add on a hyphenated word — Self-Directed IRAs and Self-Directed 401(K)s—and you will get the same reaction. Yet that simple compound word can mean a major difference for those who are planning on retiring in abundance and security. It only makes sense for those who are currently weighing their retirement options to know what they are getting into.

What are Self-Directed IRAs and Self-Directed 401(K)s and how do they differ from regular IRAs and 401(k) plans? Let’s have a look at the key differences, the key limitations, and whether or not these plans might be right for your particular retirement strategy.

Self-Directed IRAs and Self-Directed 401(K)s: A Brief Overview

The concept of Self-Direction is relatively simple: rather than outsourcing the work of investing and management to a financial advisor, you make your own choices. A Self-Directed IRA, for example, is nothing more than an IRA that you control. It will have the same overall contribution limits and characteristics that any other IRA otherwise would. The same is true of the Self-Directed 401(K).

But that control does make for a great deal of difference in how the retirement plan will be administrated. For many investors, their first involvement with a 401(k) is through an employee-sponsored plan. They then have limited options according to this plan and make do with the options available to them. In the concept of self-direction, it is possible to utilize a large variety of investment options even through a 401(k) plan—provided that the correct administrative framework has been established. This is true for both Self-Directed IRAs and Self-Directed 401(K)s.

Gaining More Control Over Your Retirement Investments

Why bother with Self-Direction? It allows you more control to make the investments you deem appropriate. For example, while your options may be limited in employee-sponsored plans, Self-Directed IRAs and Self-Directed 401(K)s allow you to invest in a wide degree of asset classes, including:

  • Real estate
  • Precious metals
  • Private lending/notes
  • Private companies
  • Tax liens and deeds
  • Joint ventures and partnerships

Although there are still some limitations—you will be expected not to invest in fine art as part of a Self-Directed IRA, for example—these options afford even the average investor with plenty of leeway for diversifying the assets in their portfolio beyond the usual medley of stocks and bonds.

How to Utilize Self-Directed IRAs and Self-Directed 401(K)s

If you are looking at an employee-sponsored plan and wonder how you can start to take control over your finances—or if you do not have a retirement plan in place at all—the idea of Self-Directed IRAs and Self-Directed 401(K)s can be quite intimidating. You are not sure which account type or investment type is right for you, and you do not know the next steps. We at American IRA, however, have created a few different pages that should guide you through what to expect:

  • Our overview of Self-Directed Accounts will steer you through the various account types – Self Directed Solo 401(k), Self-Directed SEP IRA, etc.—to get a better sense of which one might match your particular situation. It is important to do plenty of research and read up on the individual account types to get a sense of which is best for you.
  • Pay particular attention to the Self-Directed Solo 401(K) site to see if you are eligible for this type of account. A Self-Directed Solo 401(K) comes with high contribution limits, which is highly advantageous for anyone with excess money to stow away for retirement.
  • You might start by reading up on the Self-Directed IRA, or Self-Directed Traditional IRA. Even if you do not plan on opening up this particular type of account, you will find that this is a great way to get started reading up on your various retirement accounts and how they can fit into your retirement strategy.

Want more information on how a Self-Directed IRA might be administrated? Call us at American IRA at 866-7500-IRA or visit  If you would like to schedule a training session for your staff please call 828-257-4949.

Investing in Tax Liens with Self-Directed IRAs

Most of you who are reading this article are probably already familiar with Self-Directed IRAs. These marvelous vehicles for retirement savings have been around for several decades and have become a staple in the retirement portfolios of millions of Americans. But there is a good chance you have not heard of using tax liens with Self-Directed IRAs.

In fact, you might not know much about Self-Directed IRAs and may be wondering why you should even be interested in them. Well, they are not drastically different from the Traditional IRA, but they can be more powerful and comprehensive: more powerful because you have added control over your investments and more comprehensive because you have a wider range of investment options from which to choose.

Case in point: tax liens. Most IRA custodians limit your investment choices to mutual funds, individual stocks and bonds, and certificates of deposit (CDs). Investing in tax liens would not be allowed. With a Self-Directed IRA, however, alternative investments like gold, real estate, private stock, and tax liens are available to provide additional diversification for your retirement portfolio. Let’s take a closer look at tax liens for Self-Directed IRAs.

What is a tax lien?

Because local governments count on tax revenues to fund services, they may file a lien against the assets (typically real estate) of any individual who has fallen behind in tax payments. Then, instead of waiting until an unknown future date to collect the funds, the government agency will sell the lien at a public auction.  The returns can be very appealing.  For example, South Carolina offers a 12% return and Texas offers up to a 50% return.

Investors can bid on these liens at auction and, if they are successful, can earn a good return on a secure investment. The government agency raises immediate revenues, and the investor receives the legal right to accept tax payment, plus interest, from the delinquent property owner. The interest rate is determined during the bidding.  Click here to download our free guide about investing in tax liens.

What is the process of purchasing a tax lien?

States and counties often host websites that contain a list of available properties that include pictures and other pertinent information. Investors are responsible for evaluating the value of the tax lien and also the asset that supports its value. Investors place their bids in the auction and either write a check for the transaction or make arrangements with the auctioneer to pay from their Self-Directed IRA account.

Certain auctions may require buyers to fund their transactions faster than a self-directed account custodian can review and approve the transaction. The solution for this is to fund an escrow account in advance, which involves filing for a trust EIN and opening the account using the EIN instead of a social security number.

By now it should be evident that unless you are an experienced tax lien investor, you should be seeking the help of a professional. Tax liens are one of those alternative investments that make sense in a Self-Directed IRA, so it should also make sense to ensure that the process of obtaining them goes as smoothly as possible.

Once you have purchased the tax liens, you become the lienholder and wait for the delinquent taxpayer to pay the taxes. If the taxpayer fails to pay, at some point you will legally be allowed to enforce collection through foreclosure. Some laws govern the foreclosure process so, once again, it is crucial that you have professional assistance.

What are the benefits to the investor?  

In most cases, the investor is paid back all of the property taxes plus any interest that has accumulated. Sometimes, however, the property owner does not pay the taxes and the lienholder can sell the property at the best price available in the real estate market.

Tax liens with Self-Directed IRAs take the first position in most states, which makes them a secure investment, and the higher-than-normal interest rates that are paid on the liens make them preferable to CDs and treasury bonds.

Whether an investor ends up collecting interest on the debt or receives equity through foreclosure, the portfolio diversification that comes from investing in tax liens has to be considered as one of the prime benefits to a Self-Directed IRA.

We can help you get started

At American IRA, we have the tax lien professionals you need. With our simplified process, you can easily take care of your tax lien investing and tax sales transactions.

For more information on Tax Liens with Self-Directed IRAs, call us today at 866-7500-IRA (472) or visit us at  You can also click here for more information about tax liens.

Self-Directed Real Estate IRA Update – Criminal Background Checks and the Law

If you are a Self-Directed Real Estate IRA investor, it is not just tax laws governing retirement accounts you must worry about. There is a whole set of landlord-tenant laws you need to be aware of as well – and they can vary by jurisdiction.

For example, most Real Estate IRA investors have taken for granted that they will be able to run criminal background checks on applicants and screen out people with criminal histories. After all, these tenants pose a potential risk to neighbors, roommates and even potentially to the landlord.

That is not universally the case. For example, the city of Seattle made it illegal last year for property owners to decline to rent to applicants because of a criminal history. They made it a crime for landlords to even run a criminal background check.

The law, which the City Council passed unanimously last August, prohibits landlords from refusing to lease housing to individuals on the basis of their criminal history, except where the tenant is on a sexual offenders’ registry for a conviction received as an adult, and the landlord is able to provide a legitimate business reason for the discrimination.

The law also prohibits landlords from even asking about prior criminal records or creating blanket policies against renting to those with criminal histories or instructing their property managers and agents to turn down their applications. Advertisements with discriminatory language are also prohibited. Fines range from $10,000 for a first offense up to $55,000 for repeat offenders

This month, a group of small landlords affiliated with the Rental Housing Association of Washington is filing suit against the City of Seattle, arguing that the Fair Chance Housing Ordinance is unconstitutional. The RHA represents the interests of Real Estate IRA investors and those who own rental real estate directly, outside of retirement accounts. The Pacific Legal Foundation is providing legal representation.

The argument is that the ordinance is a violation of landlord free speech and due process rights. The Association also claims that the City Council.

The City states that they believe the ordinance in question is not unconstitutional and will defend it in court.

Until the Association prevails in the suit, the ban on discriminating against convicted criminals remains in force.

It is not just a Seattle issue: In 2016, the U.S. Department Housing and Urban Development began sending warning shots against landlords: ““A policy or practice that denies housing to anyone with a prior arrest or any kind of criminal conviction cannot be justified,” wrote HUD general counsel Helen Kanovsky for the U.S. Department of Housing and Urban Development (HUD).

The current HUD Administration seems to be friendlier to landlords, small businesses and investors.

It is a good idea for Self-Directed IRA investors to stay in close touch with an experienced landlord-tenant law attorney licensed in all states in which you own rental properties. Do not get blindsided by a law or ordinance you did not know about. Understand the law at the federal, state and municipal levels. And maintain adequate landlord insurance to protect you against problems.

For more information on Self-Directed IRAs, call us today at 866-7500-IRA (472). Or visit us at and download our guide to Real Estate IRA investing.

Americans Need to Save More. Here is How Self-Directed IRAs can Help.

Millions of Americans need to do more to prepare for a secure retirement. Those are the results of the newly-released 2018 Planning and Progress Study from Northwestern Mutual. Nearly 8 out of 10 Americans are concerned about their own retirement security, and more than two thirds are concerned about outliving their retirement savings.  Self-Directed IRAs may be the key to securing a nice retirement.

Key Findings:

  • One out of five Americans have no retirement savings whatsoever.
  • 33 percent of Baby Boomers – now nearing or entering their retirement age, have $25,000 or less in retirement savings.
  • Three out of four Americans believe it is only “somewhat likely” or “not at all likely” that Social Security will be there for them in retirement.
  • Almost half of all Americans have not taken any steps to help ensure they will outlive their retirement assets.

More Americans expect to be working longer into their traditional retirement years. Nearly 4 in 10 (38 percent) expect to be working at least to age 70 – well past the traditional retirement ages of 60 to 65 years. Only 33 percent expect to be able to retire during that traditional age range.

Additionally, fully 55 percent of respondents – more than half – expect they will need to work past age 65, with nearly three quarters of them reporting insufficient savings as the primary driver of the decision to keep working. Other contributing factors include the expectation that Social Security will not be around for them in its present form, and concerns over increasing health care and long-term care costs.

You can read more about the study and its methodology here.

What To Do About It

The gap between retirement income needs and the capacity of individuals’ assets to generate retirement income is substantial. Experts recommend increasing savings and investment. Here are some of the things you can do to help maximize the chances of having a secure, successful retirement:

1.)  Start saving early. The sooner you begin saving in earnest, the more compounding can work in your favor, and the less investment risk you will need to take to meet your retirement income needs.

2.)  Maximize tax-advantaged saving and investing opportunities. Save as much as you can in Self-Directed IRAs, Self-Directed Solo 401(K)s, Thrift Savings Plans and other tax-favored account types. If you have self-employment income or own a business, start a retirement plan of your own, and contribute as much as you can.

3.)  Start a Self-Directed IRA. These increasingly popular Self-Directed IRAs are designed to enable investors to expose themselves to a wider variety of asset classes not readily available from traditional investment companies, which focus on stocks, bonds, mutual funds and annuities. Self-Directed IRAs enable you to take direct ownership of hand-selected real estate, gold and precious metals, tax liens and certificates, private placements, venture capital and other assets not normally available from retail brokerages and investment companies.

4.)  Own real estate. Real estate offers a powerful combination of current income, increasing income potential, capital appreciation, leverage and downside risk protection. We recommend owning at least some real estate within a Self-Directed Real Estate IRA, which allows for both income and capital appreciation on a tax-deferred basis, or in the case of Self-Directed Roth IRA accounts, tax-free.

5.)  Reduce the fees you pay. The average actively-managed mutual fund can sap your portfolio of 20 percent or more of its value over a lifetime, thanks to high mutual fund expense ratios and other hidden transactions. Consider migrating some of your assets to index funds and pull assets from accounts with expensive “wrap” fees and assets-under-management fees to firms that charge a much more reasonable flat rate for services rendered. For example, if you are a long-term, buy-and-hold investor, it makes little sense to subsidize other investors’ trading by paying a high expense ratio, which can eat away at your retirement nest egg like termites.

This can cost thousands of dollars per year in a good-sized investment portfolio. A flat rate, menu-based fee schedule may cost a small fraction of the fees and expenses you’re currently paying to a traditional broker or investment company.

6.)  Start taking positive steps today. For example, open a Self-Directed IRA or Real Estate IRA with American IRA, LLC. American IRA is one of America’s leading providers of administrative services for Self-Directed IRAs of all stripes. Once your account is open and funded, it is very easy to purchase assets – including entire houses and apartment buildings – for your retirement portfolio.

To get started, call us today at 866-7500-IRA (472) or visit us on the Web at


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