What is a retirement plan?

I read an online article today that really got me thinking about what it means to have a "Retirement Plan” and just what it means to have one.

The sad fact is that most people between the ages of 50 and 60 do not have a formal retirement plan. Recent economic events have impacted this age group more than almost any other, since most in this
group have been hit with a double whammy of declining home equity and declines in the value of traditional securities investments in a 401k or other qualified pension plan, if they have an employer
that still offers one. This is the same group that has been setting records for consumption, borrowing and spending for years.

For people under 50 the recession has reinforced the need to give more thought to what ...

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Protection Varies by State and Type of Plan

Most people assume that the assets in an IRA are 100% protected from Creditors.  Almost everyone remembers that the NFL Pension assets of accused murderer and ex-football star O.J. Simpson were protected against a civil action by the family of his ex-wife. His plan was a Qualifed Plan and not an IRA and were protected from garnishment in that suit. Your legal and/or tax professionals should be familiar or get familiar with State statutes that may override Federal protections in certain, limited situations.

Asset protection of pensions includes some gray areas of the law and the treatment of retirement assets is affected by several factors. The Bankruptcy Reform Act of 2005 provided a good deal of clarification regarding access to assets in both Qualified and Non-Qualified Plans. There is also a useful discussion of asset protection in various plans at: http://www.petershannonco.com/timely_tax_topics2.htm .

The two ...<< MORE >>

Anyone Can Save to Make Pension Contributions to a Self Directed Retirement Plan

If they really want to, any working person can find a way to save for the future in the form of tax deductible contributions to an IRA, or for the self employed, an Individual (k) plan or other Self Directed Retirement Plan (SDRP). After many presentations on SDRP's I get audience members pulling me aside to tell me that what I am saying makes sense, but that they don't make enough or are simply unable to save for retirement.

Because I already know the answer, I always ask them a direct question; "Do you have a written monthly budget that you update weekly?"  99% of the time, they say, "no I do not, or I've been meaning to do that" or something similar.  Since there are 52 weeks in a year, if you find $50 of fluff somewhere in your budget you can ...<< MORE >>

More answers to your many questions on Purchasing Real Estate in an IRA!

The response to my entry on the direct purchase of Real Estate using IRA assets was amazing. There were so many good questions that I decided to share some questions and answers. Let me know if you have more questions. Please note, we will use the word IRA, but many other types of Self Directed Retirement Plans (SDRP's) allow the direct purchase of Real Estate.

Q: We are getting ready to purchase some investment rental properties with our self direct IRA’s.  Can we discuss the following questions about our new self direct IRA?
A: Yes, but remember I cannot help you with tax, legal or investment advice as I am not not a professional advisor, simply an educator. If your current professionals do not know the answers, refer them to me and I can help them find that ...<< MORE >>

On Demand Webinar "Getting Started with Self Directed Retirement Plans"

Many of my readers have suggested that I find a way to include recordings of my webinars on my site. This recent webinar on Self Directed Retirement Plans includes a discussion of basic plan features and a couple of speakers on alternative investments in Real Estate and Structured Settlement Annuities.  To download and play the entire webinar you will need Windows Media Player. You can click on the link below to download the .wmv file.

As always, I welcome your feedback and questions or suggestions for new topics.

Getting Started with Self Directed Retirement Plans. 5 minutes of a pre-recorded webinar available for download and viewing with Windows Media Player


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Everyone Pays for What Bernie did if the same thing happens again...

They said that people in the courtroom cheered when the 150 year sentence was announced on the "Day of Reckoning" for Mr. Madoff. Since Bernie is 71, this is a life sentence. He will lose his lavish lifestyle on Park Avenue in trade for a small prison cell where he is still guaranteed free a free room, 3 square meals a day and the best of free health care. There are more than 48 million Americans who do not have the "luxury" of health care benefits, and I would guess that many of those have no free room are not guaranteed 3 squares a day, so to that extent Bernie is still ahead of many Americans.

Who Else Loses?

Of course the innocent members of his family (there must be some) ...<< MORE >>

Buy Deeply Discounted Cash Flow Real Estate in your Self Directed Retirement Plan

Everyone has heard about the exceptional values in the real estate marketplace represented by Bank Owned, "Real Estate Owned Properties" (REO). Banks which have foreclosed on properties are marketing them through retail channels that include Brokers and Agents that specialize in REO properties. These brokers and agents in particular are familiar with the processes and procedures used when dealing with the Asset Managers and Loan Servicers who control the sale of these deeply discounted properties. On a daily basis, investors are buying properties that yield very competitive cash on cash returns in California and many other states and there is the possibility of future appreciation over time on top of monthly returns.

Not everyone is aware that you can make Alternative Investments in a Self Directed Retirement Plan including the purchase of REO real estate for investment.

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Due Diligence in your Self Directed Retirement Plan

Recently I have had a number of calls from clients and readers who have lost money in alternative investments they selected for their own self directed plan. My first question when I get a call  like this is, "what Due Diligence did you do to determine if the investment sponsor was legitimate and what calculations did you base your decision on?"  In almost every case, the decision to buy was made in the heat of a selling event and almost no Due Diligence was conducted prior to the purchase. The purchase of local hard assets, like real estate you can physically see, touch and inspect is one way to avoid an investment fiasco.

We are in tough times and tough times often bring out the best in human nature, but also nuture the worst. People under financial pressure will do and ...<< MORE >>

Or, if I only knew then what I know now...

Recently while surfing the net I came across a well written blog by a "thirtysomething" on "Financial Commandments for Your Thirties" that brings home to me the slow spread of a new paradigm among younger generations about money. Namely that there are good reasons to carefully manage it and to save it for the future and specifically that "Debt is not Wealth".

As a Baby Boomer I was very happy to see this viewpoint expressed and I realize that younger generations may have a better grasp of financial reality than mine at that age. This realization was reinforced when I recently held an open house (one of my hats is as a Realtor in CA for a Broker specializing in Bank owned (REO) properties). A group of young people came in to see an REO property in a popular ...<< MORE >>

Dealing with New Realities in Middle Class America

In a recent entry on one of my other blogs at http://unsustainabubble.com in an entry called "Going Down with the Joneses", I wrote about the paradigm shift that is taking place in the American Middle Class. Specifically the difficult, disruptive and very painful adjustments that are being made in saving, spending and consumption and over all life styles, accelerated by the current economic crisis and rapidly expanding unemployment. In a future article I want to discuss the key factors in our financial history that have brought us to this point and the strategies we can use going forward to best create sustained abundance, regardless of the external environment.

One of the ways people will begin to rebuild wealth once they have dealt with their debt and created an emergency fund, will be to increase the amount of contributions they make to ...<< MORE >>