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May IRA Insights: Worried About Your Financial Future?

Most of us utilize a company 401(k) plan or depend on major financial institutions to invest our retirement dollars and pray for double digit growth. With the downturn in the markets, the economy in general and the continued slide in real estate, does th

By: Lisa Bromma

IRA Insights

By: Lisa Moren Bromma

Most of us utilize a company 401(k) plan or depend on major financial institutions to invest our retirement dollars and pray for double digit growth. With the downturn in the markets, the economy in general and the continued slide in real estate, does this really make sense?

Maybe it is time to consider what other investment choices are out there to help you get ahead. Of course, if you are covered by a retirement plan at work, your IRA contribution may not be deductible. Some workers may qualify for a deductible IRA even if they are covered by a company pension plan. Check with your company plan administrator to see if you qualify.

There's also the Roth IRA. You don't get the tax deduction, since you use after tax dollars for Roth contributions. But, any profit from your investments in a Roth grow on a tax-free basis!

Once you have assessed which IRA is for you, consider a self-directed IRA. With a self-directed IRA, you can acquire alternative investments that truly diversify your IRA into something you choose and provide the returns you are looking for.

Many of us have not studied the markets, so we are not experts. However, with a self-directed plan, you can thoroughly examine each investment type to see if it is right for you.

A self-directed IRA gives you a unique opportunity to invest your retirement dollars on a tax-deferred or tax-free basis, depending on the IRA. For example, gas is $4.00 per gallon as I write this. Would investing in oil and gas make sense to you? If so, how would you do this, where would you go? And how is the return calculated? This is our job as investors to do the research and determine if the particular investment is the right one.

What about water? There are funds out there that sell shares of water. Yes, you read this right, water. Would this make a good investment? It may, if you think we will run out of water!

How about wind turbines, solar energy companies, new business ventures, private lending? What about undervalued real estate that you may be able to pick up in foreclosure?

What other unique and timely investments are out there? With the dollar as volatile as it is, you might consider gold or silver as a hedge against inflation or the declining dollar.

Your self-directed plan is as unique as you are. You invest in choices you feel are right and can protect you in the rough waters ahead.

So, what are you waiting for?

Lisa Moren Bromma has been a real estate investor since 1978, a note investor since 1998 and has worked with some of the top private mortgage institutional buyers. She is the author of Real Estate Investing for the Utterly Confused, and Wise Women Invest in Real Estate. Please visit WiseWomenInvestor.com.

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