Wyoming Self-Directed IRA
The Cowboy State is blessed with beautiful mountain scenery, clear skies, wide open spaces, abundant freshwater fishing, hunting, mountain climbing, off-roading and skiing, rodeos, and low taxes – especially for retirees. There’s also the one and only Yellowstone National Park and the iconic Devil’s Tower.
If you enjoy the rural lifestyle, love the Wild West, horses and equine culture, and want to enjoy the Great Outdoors on a budget, Wyoming is an excellent choice.
Winter sports fans will love Wyoming and its many great resorts for skiing. Jackson Hole is a world-famous ski destination, but there’s also fantastic skiing at the Grand Targhee Resort in Alta, the Snowy Range Ski and Recreation Area in Centennial, Sleeping Giant Ski Area in Cody, Hogadon Basin in Casper, Pine Creek Ski Resort in Cokeville, and White Pine Ski Resort in Pinedale.
Firearms are popular in Wyoming, and the state lets anyone carry a weapon either openly or concealed as long as they are not individually a prohibited possessor because of age, previous felony convictions, etc. In any big crowd of people, you can bet a bunch of people are packing heat.
Naturally, crime rates are quite low.
Golf fanatics will enjoy the links at Snake River Sporting Club in Jackson, Shooting Star Golf Club in Teton Village, 3 Creek Ranch Golf Club in Jackson, the Jackson Hole Golf & Tennis Club and the Teton Pines Resort and Golf Club in Wilson.
Why a Wyoming Self-Directed IRA?
Stocks. Mutual funds. CDs. Bonds.
For years, you have heard that these are the types of investment vehicles through which to secure your retirement. The stock market tends to appreciate over the long haul, after all, and bonds are conservative and low on risk. Mutual funds have popped up in recent decades as one of the most popular investment vehicles as well, closely monitoring certain aspects of the stock market.
What most people do not know is that these are not the only investment types available for retirement.
In fact, if you choose self-direction, you will find that the IRS allows for all sorts of different types of investments in a retirement account. You can invest in gold and precious metals, real estate, private companies, and more. There are a few select limits on the sorts of investments you can make, but the good news is: you often have more legal options than you have limits.
For many people, a Wyoming Self-Directed IRA means freedom, opportunity, and self-determination. It means not being satisfied that the “market” is the only market that exists. It does not mean you have to switch away all of your old investments. But if you want to invest in real estate or gold to help ensure a secure retirement, those options are indeed open…
And, like other IRA types, Wyoming Self-Directed IRAs come with all sorts of investment protections.
Understand Your Wyoming Self-Directed IRA Plan Options
Let’s take a moment to consider the various retirement account types:
- Traditional Self-Directed IRA: A retirement account in which you can invest pre-tax or after-tax dollars, and in which your investments grow tax-deferred, meaning you will pay taxes on them once you begin withdrawing them. When you start making retirement withdrawals–defined as withdrawals after you turn 59.5 years old–the money is treated as income.
- Self-Directed Roth IRA: Similar to a Traditional IRA, except you make after-tax dollar contributions so you are paying taxes on the front end. This allows your investments to grow tax-free. After the account has been established for 5 years and after you turn 59.5, your withdrawals are tax and penalty-free.
- Traditional 401(k): A qualified plan that allows employees to make pre-tax elective deferrals. Business owners who want to self-direct can use these as well and allow employees to self-direct their accounts.
- Self-Directed SEP IRA: Simplified Employee Pension that allows employers to make contributions to the retirement of their employees. An employer can also contribute to their own retirement with a Self-Directed SEP IRA.
- Self-Directed SIMPLE IRA: Savings Incentive Match Plan for Employees. A “tax-favored” plan that small businesses and individuals can set up for their employees.
- Self-Directed Solo 401(k): A 401(k) plan that a self-employed individual can use for retirement that offers high contribution limits.
As noted throughout, these same accounts offer a high degree of self-direction if you want to direct your own accounts.
A Variety of Investments
One of the chief benefits of directing your own retirement account is that you get to choose your investments from a wide range of options:
- Real estate: Apartment buildings, commercial property, retail space, raw land, etc. If you want to earn an immediate income for your retirement account with your investments, rent can be one of the most powerful ways to ensure that. You can also use leverage in a Wyoming Self-Directed Real Estate IRA when using non-recourse loans.
- Private IRA Lending: You can negotiate the terms, interest rate, and length of the loan, as well as other variables like the monthly payment amounts and whether the loan is secured or unsecured.
- Private companies: Public stocks are what most people think of as “investments,” but there are also private stocks to consider. There is a lot of opportunity for growth in private company stock, but also plenty of risk to consider.
- Tax liens: With a high rate of return, these investment types are ideal for self-directing investors with smaller accounts.
- Precious metals: Gold, silver, platinum, palladium. These metals are famous as a “hedge” against economic downturn, which is why many people turn to them as a way to avoid putting all of their eggs in the stock market basket.
- Single Member LLC: An investor can create an LLC to be owned by their Wyoming Self-Directed IRA, managing it themselves. This gives a significant degree of protection; however, you will likely want to consult with a professional to learn how to do this properly.
What You Can’t Do with a Wyoming Self-Directed IRA
As fun as it is to talk about the various options you can have with a self-directed retirement account, it should be noted that there are certain limits, as well. You cannot self-direct a retirement account to invest in life insurance, collectibles like art, gems/jewelry, coins, alcoholic beverages, and tangible personal property. As enticing as it might be to put that wine cellar under a Self-Directed IRA protection, it’s simply prohibited–so look for your protected retirement investments elsewhere.
Who You Cannot Do Business With
A disqualified person is anyone the Self-Directed IRA has decided is not “arm’s length” from the IRA. Your IRA cannot engage in any transactions with these individuals or you risk the tax-status of your IRA.
A Disqualified Person is:
- Your spouse
- Any of your lineal ascendants or descendants (parents, children, grandchildren, and the spouses of children, grandchildren, etc. – including legally adopted children).
- Any investment providers or fiduciaries of the IRA.
- Any entity (a corporation, LLC, trust, etc.) where a disqualified person owns more than 50%.
- Any entity (like previously listed) where the IRA account holder is an officer, director, a 10% or more shareholder, or a highly compensated employee.
Although we have thrown a lot of abbreviations and words at you, you should know that self-directing your retirement is not as complicated as it might sound. The steps are very simple:
- Open a Wyoming Self-Directed IRA with American IRA. Make sure to put thought into the type of account you would like to open; review the options available to you and select the one that makes the most sense for your individual situation.
- Fund your account. This is where the options can throw people off. Let’s take a look at them quickly:
- Contribution: Simply putting money into the account throughout the year. This is what a lot of the funding will look like once the account is already opened.
- Conversion: Withdrawing part or all of the cash/assets from a Traditional IRA and putting them into a Roth IRA is called a conversion. Once the cash/assets are distributed, you have 60 days to put them in the Roth IRA account.
- Rollover: A tax-free distribution of cash/assets from one account to be put in another retirement account. You are permitted one rollover per year.
- Transfer: Transferring cash/assets directly from one retirement account to another retirement account. Because you do not take direct possession of the cash/assets, you are allowed unlimited transfers and there is no tax.
How it Works
1.) Open an American IRA Self-Directed IRA
- Select the type of account that you would like to open.
2.) Fund Your Account
- Move money into your account by transfer, rollover or contribution.
3.) Select an Investment
- Find an asset you want your IRA to purchase and submit an Investment Form. American IRA will work with you and your professionals for a smooth closing.
4.) Review the Instructions
- Visit the “How it Works” page on our website to review the instructions for the asset you want to purchase and submit the paperwork required for the investment you have chosen.
5.) Provide Payment Authorization
Submit Payment Authorization Forms for expenses that pertain to the asset your IRA has purchased.
6.) Submit Deposit Coupons
Deposit income generated from the asset your IRA purchased by submitting a Deposit Coupon along with the funds.
Tax and Financial Considerations for Wyoming Self-Directed IRA Owners
Overall, Wyoming’s cost of living is just about 5% higher than the national average, according to Sperling’s Best Places.
The median house price in Wyoming as of May 2019 is $230,800, compared to $219,700 in the rest of the country. Notably, health care costs are 33% higher than the national average – perhaps a function of the sparse population that makes it tough for health care organizations to realize economies of scale like they can in the big city.
Things are very pricey in Jackson itself, though: The median home cost in Jackson, WY is $850,200. And prices are even higher in the famed Jackson Hole, where the median list price for single-family homes reached 2.65 million at year-end 2018, according to local sources.
However, it’s easy to find much more reasonably-priced housing a little ways out of town – and as more and more people discover Wyoming as a retirement destination, these may be good spots for forward-thinking real estate investors to explore.
Wyoming State Income Taxes
Wyoming is among just a few states with no state personal income tax whatsoever. Income from all retirement sources, including labor, is free of income tax at the state level. Income from Wyoming Self-Directed IRAs, 401(k)s, public and private pensions and Social Security benefits are all free of any state income tax.
Wyoming sales taxes
Wyoming has a statewide sales tax of 4%, and local governments may add up to 2% to that. Prescription drugs and food for consumption at home are exempt from the state income tax. The average comes in about 5.4%, which is reasonable in a state with no income tax and a low property tax.
Wyoming Self-Directed Real Estate IRAs
Wyoming is one of the country’s most favorable environments for Wyoming Self-Directed Real Estate IRA investors and real estate investors in general: Rental and IRA income are both free of state income tax to the individual in Wyoming, and effective property taxes are among the lowest quintile of states in the country, on average, at just 0.61%.
Wyoming currently has three property tax relief or deferral programs available:
- The Veteran’s Property Tax Exception
Up to $3,000 in assessed value is exempted from property taxes. Available to Honorably discharged veterans of WWI, WWII, Korea, Viet Nam, or honorably discharged veteran who was awarded the Armed Forces Expeditionary Medal or other authorized service or campaign medal indicating service for the United States in any armed conflict in a foreign country; surviving spouses of qualifying veterans; certain disabled veterans may be eligible for the exemption.
- Property Tax Deferral Program
Allows qualified homeowners to defer up to 50% of their property taxes. To be eligible, applicants maintain their personally owned principal residence on a parcel of land of less than 40 acres. Owner must have limited income, be over 62 years old or handicapped (as determined by the Social Security Administration) and have purchased property 10 years prior to applying for deferral of taxes.
- The Property Tax Refund Program
This program allows certain Wyoming taxpayers to qualify for a refund of up to ½ of the median residential property tax amount, or up to ½ the property tax bill – whichever is less. To qualify, you must have a household income less than the greater of 3/4 of the county or state median household income. Also, household assets other than your house, a car for each adult household member, and Wyoming Self-Directed IRA and other pension funds must be worth less than $120,339 per adult household member. You must also be a resident of Wyoming for at least the past 5 years.
Wyoming Estate and Inheritance Taxes
Wyoming has no estate or inheritance taxes.
Other Wyoming Taxes
Wyoming imposes a gasoline tax of 42.4 cents per gallon, and a 48.4 cent per gallon tax on diesel fuel. The cigarette tax is 60 cents per pack of 20 – making Wyoming one of the most smoker-friendly states in the country.
There’s also a county lodging tax of between 2 and 4 percent, location dependent.
Benefits of Retiring in Wyoming
If you are interested in seeking retirement in Wyoming, or if you simply want to think about it as a long-term option, you might consider a Self-Directed IRA. A Wyoming Self-Directed IRA will allow you to handle plenty of different investments under your own control—all while enjoying the tax protections of retirement accounts.
Are you interested in retiring in Wyoming? Want to learn more about how to take advantage of all of the retirement capabilities you have? Then it’s time to think about a Self-Directed IRA. Continue browsing this website to learn more about a Wyoming Self-Directed IRA or contact us at 828-257-4949 to learn more about how you can secure a retirement for yourself.
About American IRA, LLC
American IRA, LLC is one of the leading third-party administrators for self-directed retirement accounts in the United States. The custodian New Vision Trust Company is a South Dakota regulated trust company. Founder and president Jim Hitt has been investing his own personal assets in Self-Directed IRAs, including Self-Directed Real Estate IRAs, for more than 35 years, and has helped thousands of others declare independence from Wall Street investment companies with their high fees and limited investment menus and become successful Self-Directed IRA investors.
American IRA has offices in Asheville and Charlotte, North Carolina, and Atlanta, GA, but we serve investors from all over the United States and even expats who want to realize the benefits of self-directed retirement investing techniques in Wyoming Self-Directed IRAs, Self-Directed Roth IRAs, Self-Directed SEP IRAs, Self-Directed SIMPLE IRAs and even Self-Directed CESAs and Self-Directed HSAs.
A Wyoming Self-Directed IRA with American IRA, LLC can help you achieve greater diversification by making it easier to invest in alternative asset classes not commonly available from large investment companies. Self-Directed IRAs also allow you to take more direct control of your retirement assets, while minimizing exposure to needlessly high expense ratios, commissions, wrap fees, 12-b-1 fees and AUM fees commonly charged by Wall Street investment companies. Our much more efficient flat-fee, menu-based fee schedule frequently allows investors to save thousands in fees each year – particularly with larger accounts and buy-and-hold investors.
With a Wyoming Self-Directed IRA from American IRA, LLC, you can quickly and easily invest in alternative asset classes like direct real estate ownership, tax liens and certificates, mortgage lending, precious metals, and much more.
To get started, click here to open an account, or call American IRA today at 866-7500-IRA(472).