IRA Rollover Frequently Asked Questions.

By: Wai-Yew “Andrew” Lam, President of Adelphi Retirement Management, Inc.

IRA Rollover or IRA Transfer – When you rollover a qualified retirement account (like a pension plan lump sum, 401k, or 403b) to an IRA, or transfer funds or investments from one IRA to another, if done correctly, it is not considered an IRA withdrawal. Since there is no distribution of funds to you, the transfer is tax-free. There are subtle differences between what is considered an IRA rollover, and what is considered an IRA transfer. The important thing to know; with either one the funds must be deposited in the new account no less than 60 days from the time they were withdrawn from the old one. Below are the most frequently asked questions about IRA rollovers.

1. Can I Use An IRA Rollover To Move Funds Out Of My Employer Sponsored Plan While I Still Work There?

Most employer sponsored retirement plans do not allow you to roll funds out of the plan while you are still employed. To find out if they do, you can call your plan sponsor, and ask if they allow what is called an “in-service distribution”. An in-service distribution is not the same thing as a loan or hardship withdrawal. Instead, for those few plans that allow it, an in-service distribution is a transaction where you can rollover funds for your plan into a self-directed IRA account while you are still employed.

No Longer Employed

Once you are no longer employed, it may make sense to roll funds from your plan into an IRA account. At that time, to avoid tax withholding, you’ll want to choose what is called a direct IRA rollover.

2. Will Taxes Be Withheld When I Move Funds From My Employer Plan To An IRA Rollover?

When rolling funds from an employer sponsored plan to your IRA, you can avoid mandatory tax withholding (explained below) by requesting a direct rollover. In this case, although the check may be mailed to you, it will be made payable directly to your new trustee or custodian.

Mandatory Tax Withholding Required If IRA Rollover Distribution Paid To You

If an eligible rollover distribution is paid directly to you, the payer must withhold 20% of it, which they send directly to the IRS for taxes. This applies even if you plan to roll over the distribution to a traditional IRA.

You can avoid tax withholding by choosing a direct rollover option, where the distribution check is payable directly to your new trustee or custodian.

3. Will I Be Taxed If I Transfer Funds From One IRA To Another IRA?

An IRA transfer occurs when your move IRA funds from one trustee (or custodian) directly to another trustee, either at your request or at the trustee’s request. As long as there is no distribution payable to you, the transfer is tax free.

4. Can I Use My IRA Funds Tax Free If I Deposit Them Back Into My IRA?

If you withdraw funds from an IRA, and then subsequently redeposit them to your IRA within 60 days, the transaction would not be taxed. Use caution – since your custodian does not know if you will be redepositing the funds, they may be required to withhold 20% in taxes from your initial distribution. You would have to be able to repay this 20% out of pocket. You would recover it when you filed your tax return. You could use this 60 day provision to “borrow” funds from your IRA for a short period of time. However, if any portion of the distribution is not repaid within the 60 days, and you are under age 59 1/2, it would be considered an IRA early withdrawal, subject to taxes and penalties, unless you could qualify for an exception.

Once A Year IRA Rollover Provision

You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. You can only use this provision once per year, per each receiving and distributing IRA account.

Example

You cannot roll funds from IRA-1 to IRA-2 over 60 days, then from IRA-2 to IRA-3 over another 60 days, and so on. However if you had four IRA accounts to begin with, then within the same year you could use the 60 day rollover provision between IRA 1 and 2, and between IRA 3 and 4. Eligible rollover provisions from employer sponsored retirement plans are not subject to the once-a-year provision.

5. Can I Use An IRA Rollover To Move Just Part Of My Account?

IRA rollovers are not an all-or-nothing proposition. You can use an IRA rollover to move just a portion of your funds from one IRA to another or to rollover just part of a qualified plan to an IRA.

6. I Inherited An IRA. Can I Roll This Into My Own IRA?

If you inherit a traditional IRA from your spouse, you can roll the funds into your own IRA, or you can choose to title it as an inherited IRA. There are pros and cons to doing it either way.

IRA Not Inherited From A Spouse

If you inherit a traditional IRA from someone other than your spouse, you cannot roll it over or allow it to receive a rollover contribution. You must withdraw the IRA assets within a specified period of time.

7. Can I Rollover My Required Minimum Distributions?

Amounts that must be distributed during a particular year under the required minimum distribution rules are not eligible for IRA rollover treatment.

8. Do I Have To Report IRA Rollover Transactions On My Tax Return?

IRA rollovers are reported on your tax return, but as a non-taxable transaction. Even if you correctly execute an IRA rollover, it is possible that your plan trustee or custodian will report it wrong on the 1099-R they issue to you and to the IRS. I have seen this occur many times in my career. If your custodian reported the transaction incorrectly, and you hand off the documentation to your tax-preparer without explaining the transaction to them, it could get reported on your return incorrectly. To make sure you don’t pay tax on an IRA rollover or transfer, carefully explain any IRA rollover or transfer transactions to your tax preparer, or double check all documentation if you prepare your own return.

How to invest in private notes using your Self-directed IRA account.

By: Wai-Yew “Andrew” Lam, President of Adelphi Retirement Management, Inc.

Expanding Small Business Finance Solutions.

Small businesses play a vital part in the American economy. They employ over half of all U.S. workers and generate the bulk of GDP, according to the Small Business Administration (SBA). Yet while many large corporations have benefited from improved access to capital this year, small and medium-sized businesses continue their struggle to find financing solutions that can help them thrive and, in turn, help the economy grow.

A September study of 7,502 small businesses by Pepperdine University’s Graziadio School of Business and Management found that over the past 12 months fewer than half – just 44.5% – of small business loan applications were approved by banks. Taking 16 to 24 hours away from minding the store to pursue loan can be extremely detrimental to any small business, especially when the odds are not in their favor.

Recent research by the SBA finds that access to capital remains one of the central concerns of businesses, even though three years have elapsed since the financial crises began. Which has been exacerbated as the economy has tightened – a lot of credit isn’t as available as it had been in the past.

Learn how Self-directed IRA investors are providing vital new financing. 

Sensing a lack of financing options for small businesses, many savvy Self-directed IRA investors have been actively using their retirement accounts to lend money (via private notes) to help small businesses in need of funds to grow their business. Typically, these types of loans are secured against the business’s account receivables as collateral. This new financing tool provides quick and straightforward access to cash for business needs. Effectively, this gives small companies access to the type of cash-flow-gap financing that only large corporations have enjoyed.

How to offer simple financing for a challenging and complex economy: Cash.

Once you open a Self-directed IRA account, you can start offering potential borrowers a new way to access cash to help build their businesses via private notes. This type of account allows you to invest in solid businesses that you know well. It is time to explore a new investment model to help build your retirement account. Why put all your eggs in one basket – Stocks and mutual funds?

Visit www.AdelphiRetirement.com and learn the power of Self-directed IRA investing. Call to explore how we can help you diversify and invest in things you know at 520-838-0851 or email us: info@adelphiretirement.com. Always take control of your retirement destiny!

Where are Self-directed IRA investors investing these days? (College cities and towns)

Every year, millions of college students flood into college cities and towns. Those students, along with the faculty and staff at their schools, have one common need: housing. Consistent demand for housing makes college and university communities attractive to people interested in real estate investing. Read on to find out if it is an investment option that you should consider.

The Opportunity

Whereas housing demand may fluctuate in other areas, college towns boast a steady flow of students, professors and staff, and a percentage of those will always require off-campus housing. Most colleges and universities do not have enough on-campus housing to satisfy demand, and when school budgets are tight, maintaining and upgrading housing can take a back seat to other financial priorities. Properties that are well-maintained, well-marketed, competitively priced and close to amenities can attract buyers and renters alike.

Since 2007, Self-directed investors are beginning to realize the multiple benefits of investing in real estate in these communities, taking advantage of the housing crises. Our investors are viewing off-campus housing options as safe investment, but also be an investment that could appreciate in value for resale or a place to retire in. According to AARP, baby boomers are increasingly citing a preference for college and university communities for post-retirement housing.

Investment Options

To determine what type of real estate investment you might be interested in, honestly evaluate:

• How much time you have to commit to managing an investment.
• Financing your investment using a Self-directed IRA account is almost impossible, it must be an all cash purchase
• Your retirement time horizon.

Where to Look

Once you have narrowed your investment options, there may be several areas available to choose from. Decide how physically close you want to be to a potential investment property and then draw a “radius” surrounding one or more colleges where you are interested in investing. Do some research and consider the following questions:

• Look for public schools that deliver an outstanding education and affordability.
• Is the school opening a new campus in a nearby community?
• Is the school planning to build additional academic buildings and/or add programs of study to expand enrollment?
• Is the campus diminishing in size? If a school is shrinking in size, either the student enrollment is dropping off or the school is considering dropping programs due to lack of funding. If you are prepared to become a long-term investor, you may be able to find a reasonably priced property with the potential for long-term value in a declining market.

It’s important to take the time to research communities where you are considering investing to see what the local real estate market is like. Call the school’s admissions office to find out information that could potentially affect a real estate investment, such as:

• The school’s current and projected future enrollment
• The school’s current and projected ratio of students to on-campus housing units
• How much off-campus property is university-owned
• School spending on housing for students

As you evaluate your options, keep in mind that private schools tend to have strict housing policies, lower enrollments and lower student-to-on-campus housing unit ratios; therefore, there may not be as much demand for off-campus housing as in a community with a public college or university. In addition, there are significant differences in the housing needs of students attending school in a city versus a suburban or rural area. For example, urban and suburban schools tend to attract a higher percentage of commuting or part-time students who may not need housing.

 

Before You Buy

As you begin evaluating available investment properties make sure that you consider the following tips:

• Find a realtor with experience selling to owner-investors. A real estate agent with experience selling to similar buyers can answer a lot of your questions up front and provide you with tips on the local rental market.
• Check on homeowners’ association rules or restrictive covenants that regulate or prohibit rentals.

Are You Ready for the Responsibility of Renting Out?

If you are seriously considering purchasing a rental investment property, it’s important to know the risks and the work involved with being a landlord. The following will give you a place to start:

• Identify your target renter. Are you most interested in renting to undergraduate and/or graduate students? Faculty? Staff?
• Identify the competition. Once you know your targeted renter, determine their alternative / competitive housing options. For example, if you are interested in renting to graduate students, how much on-campus grad-student housing is available? How much does it cost? What is the going rate at other rental properties? Evaluate potential properties based on where your target renters would prefer to live, what amenities and features they expect and what they’re willing to pay.
• Make sure you understand the cash flow of your potential investment. What are your net operating income projections? Do you have a plan for managing “gaps” when you are in between renters? For example, could you rent the driveway out for parking to commuting students or rent the property to families coming for parents’ weekends, graduation, football games, etc.?
• Create a plan for marketing the property. If you plan to find renters on your own (without using a realtor or a property-management service), you’ll need to know the best way to connect with your targeted renter. For example, if you’re interested in renting to faculty or staff, are there ways to post flyers in staff lounges? Is there an internal newsletter you could advertise in?
• Make provisions for maintaining the property. If you do not have the time, ability or inclination to interview renters, place ads, mow the lawn, repair broken appliances, steam clean carpets between renters, etc. you may want to contract with service providers, such as a property-management company, yard service or housekeeping company to ensure that the property is maintaining its value and that you know what your renters are doing.

The Bottom Line

College and university towns offer attractive options for Self-directed IRA investors. If you are nearing retirement and considering a future move, or if you would like to expand your retirement portfolio, consider exploring your options in these areas, all possible using a Self-directed IRA account. To learn more, please visit our website at wwwAdelphiRetirement.com  or email us with your questions at info@adelphiretirement.com.

How to invest in real estate using your retirement account.

By Wai-Yew “Andrew” Lam, President of Adelphi Retirement Management, Inc.

Over the last few years, stocks have cratered. Despite their recent rebound, millions of retired and almost-retired have been forced to extend their working years just to maintain a minimum standard of living. But one asset has depreciated so low that we are seeing many savvy investors snapping them up — real estate.

 And while your old 401(k) or IRA plan may not offer real estate in any form, the fact is, you can own real estate in your retirement plans called Self-directed IRA. Retirement plans are by nature long-term investments. And, you can’t get much more long term than real estate. But you must keep in mind that you’ll be able to invest only for income and appreciation. You can’t deduct depreciation, as you can in a taxable investment.

 1.     The power of Self-directed IRA account:  The law allows your qualified plan or IRA to own just about any kind of real estate. You can invest directly in property: single family and multi-unit homes, co-ops, condos, apartment buildings, mobile homes, mobile parks, even improved or unimproved land.

 If you buy a property for your IRA, the income and appreciation normally builds up tax-free until you start to take withdrawals. For those of you intending to secure a mortgage with your IRA proceeds to invest, the US banks have decidedly stop lending to IRA accounts after post 2007 financial market meltdown.

That’s why an all-cash transaction is probably the easiest. If you don’t have sufficient cash, your retirement plan can purchase a partial interest in a property. That’s known as a tenant-in-common interest. Or, you can “pool” the money by enticing other family, friends, and IRA or private investors to participate as partner.

The advantages of real estate in a retirement plan are its potential steady high rate of return, added diversification and its generally lower risk versus the stock market.

2.     We’ve made setting up a Self-directed IRA account simple:   Just called Adelphi Retirement Management, Inc., the premier Self-directed IRA Company that specializes in administering such accounts all over the country. Simply complete our enrollment form and we will set up your Self-directed IRA account within 6 weeks.

3.     Why do we set up an IRA LLC for your retirement account?  Imagine buying a car with built-in air bags, and anti-locked brakes. Should you ever get into a car accident, these safety features are designed to protect you. Similarly, we create an IRA LLC to protect you as you navigate through different kinds of investments. Building a shield to protect your personal assets from potential lawsuits in our opinion is a must.

4.     How will I take title to my investment property?  As your Self-directed IRA Company, we will ensure that you take title using your IRA LLC we have created for you.

5.     How does rental income flow back into my Self-directed IRA account?  Simple, once your IRA LLC takes title to your investment properties, you will use the same IRA LLC on your rental agreement (property owner). Monthly rental checks will be mail to you directly and made payable to your IRA LLC. Accordingly, you will mail us your rental income checks to be deposited back into your IRA account.

6.     Do I have to manage my own IRA LLC account moving forward?  Absolutely not! As your Self-directed IRA administrator, we manage your IRA LLC for the life of your account. These are: registering IRA LLC, contact IRS to setup IRA LLC tax number, create IRA LLC operating agreement, refilling IRA LLC and reporting taxes annually. 

7.     What is the major difference between your company vs the other Self-directed IRA companies out there? The major differences are.

a)     We only operate by establishing each Self-directed IRA account using an IRA LLC to invest and hold title as a shield to protect your personal assets, which our competitors don’t offer.

b)     As your Self-directed IRA administrator, we manage your IRA LLC for the life of your account. These are: registering IRA LLC, contact IRS to setup IRA LLC tax number, create IRA LLC operating agreement, refilling IRA LLC and reporting taxes annually.

c)   Staffed with experience attorneys and IRS Enroll Agents to navigate through complex tax issues.

8.     Who do you bank with? Are my IRA funds protected?  Our Custodian and Adelphi Retirement have established a banking partnership with US bank, the 5^th largest bank in the country. Each IRA LLC account is placed in a business account, all FDIC insured to $250K per account.

 9.     Any pitfalls that I need to know when investing in real estate using my IRA account?  Yes. You can’t transfer property you already own into a retirement account. You also can’t buy a vacation house and rent it out to yourself. That’s called “self-dealing” and is a prohibited transaction. It covers your family members as well. Perhaps the biggest drawback to investing in real estate for an IRA account is the loss of the depreciation deduction. However, many argue that the cash flow and appreciation benefits outweigh the loss of the depreciation deduction.

With real estate prices in many part of this country falling between 30-50% from the peak of 2006, we are seeing over a 200% increase in real estate acquisitions using Self-directed IRA account.

To learn more about our services, please visit www.AdelphiRetirement.com or contact us at 520-838-0851 to discuss and explore your options.

Legal tax shelter loop hole to save big bucks for our high income earners.

Amid all the rancor in Washington over how to rein in the federal deficit, one thing seems inevitable: If you’re a six-figure earner, your tax bill has nowhere to go but up. The good news? A quirk in the tax code gives you a new backdoor opportunity to build your savings and shelter more of your income from the threat of higher taxes.

 The opportunity lies with the Roth IRA, a tax-sheltered savings plan previously off-limits to high-income investors. Affluent savers have been confined to traditional IRAs, where contributions are sometimes deductible, and investment gains compound tax-deferred. But future withdrawals are taxed as ordinary income — not an attractive prospect if tax rates rise. With a Roth IRA, on the other hand, contributions are made with after-tax dollars, but all future gains and withdrawals are 100% tax-free in retirement. You can contribute up to $5,000 a year (or $6,000 if age 50 or older) to a Roth, but only if your income falls below a certain threshold.

 Last year Congress handed a break to high-income earners when it changed the tax code to allow anyone, regardless of income, to convert money already sitting in a traditional IRA to the Roth version. Prior to 2010, Roth conversions were allowed only for single or married taxpayers with modified adjusted gross incomes below $100,000. There’s no dollar limit on the amount of traditional IRAs you can convert. But you’ll have to pay taxes on any contributions or investment gains that had been tax-deferred to that point.

 Kept in place were the income limits designed to stop affluent taxpayers from funneling new money into Roths. For 2011, single tax filers can make only the maximum Roth IRA contribution if their modified adjusted gross income is less than $107,000; once their income hits $122,000, they can’t contribute at all. For married couples filing jointly, allowable contributions begin to phase out when their combined income reaches $169,000.

Inexplicably, Congress left a major loophole in the new tax code. No matter what your income, you’re eligible to open a traditional, nondeductible IRA, which you can then convert to a Roth now that the income limits on conversions have been lifted. And you can repeat the process each year as long as the loophole is in place, making it perfectly a legal maneuver and a great strategy for high-income investors.

 Before making this move, however, you should consider converting any existing traditional IRAs you have to a Roth or move them into your 401(k) plan if allowed. Otherwise the IRS may hit you with a tax bill on a portion of your backdoor Roth contribution.

You have until April 17, 2012, to make your nondeductible IRA contribution for 2011 before flipping it to a Roth. After that? Whether Congress will ultimately close the Roth loophole is anyone’s guess. But given a chance to put money in an account that’s tax-free for life, don’t wait to find out.

 Wai-Yew “Andre” Lam, President

Adelphi Retirement Management, Inc.

www.AdelphiRetirement.com

Power your retirement account using “The Rule of 72″

Albert Einstein himself once called this math formula the most powerful concept in the universe. It is one that I believe everyone must consider every time you invest your retirement funds. It is called “The Rule of 72”.

Here’s how this simple math formula works: Divide the number 72 by the interest rate your retirement money is earning, and you will get the number of years it will take your retirement account to double. For example, if you invest $1000 in a bank CD and your bank is paying you 2% interest, then it will take 36 years for your savings to double:

72 divide 2% = 36 … so … your …$1000 becomes $2000 in 36 years.

Those of you, who are thinking about your retirement accounts, should do this simple exercise. Let’s say you’ve put $30,000 away and it is earning a hypothetical 3% interest from your mutual funds, it will take 24 years for that amount to double to $60,000. Unfortunately, the below news article will realistically change our example of 3% to zero for you mutual fund investors, just copy and paste the link below onto Google search.

http://finance.yahoo.com/blogs/daily-ticker/lost-decade-bulls-even-worse-perma-bears-154130357.html?sec=topStories&pos=4&asset=&ccode

More bad news folks, from the above news feed, we can now reasonably expect your retirement account to break even if you are lucky, not factoring in the dreaded word “Inflation”,  which will eat away any gains..

So, what are our average investors to do? How can they power one’s own investment in order to retire as planned? The answer is a simple: Self-directed IRA account.

For years, Adelphi Retirement Management Inc. have been mentoring and helping thousands of investors all over the country to promote wealth building using these accounts. To learn more about Self-directed IRA investing, please visit our website at www.AdelphiRetirement.com.

With smaller retirement accounts in the low $50K, there are plenty of investment opportunities besides parking it into a bank CD or mutual funds – all generating woefully low returns.

With real estate prices at a 20 year low and rents holding strong, now is a good time to invest in a rental income property. Alternatively, you can also invest in mobile homes, turning it into a rental income property, mobile home notes (refinance program) or you can also invest in a friend or family member business that you believe in. With Self-directed IRA investment, anything is possible.

Here in Tucson, we’ve been helping hundreds of investors to invest in mobile homes, mobile notes and parks for years. Working with local property management companies, investors are able to invest in these investments with ease for a low fee. Why invest in these assets? Well, we truly believe in affordable housing. Traditionally, the rate of return is between 9% – 12% annually, providing safer returns.

In closing, use The Rule of 72 in your retirement planning. It can make a big difference in 10, 20 or 30 years down the road whatever your retirement goal is. Call us to discuss and explore all your investment options and needs. With a Self-directed IRA account, we can help you take charge of your retirement account again and provide you with the peace of mind.

It is never too late, email us at wlam@adelphiretirement.com with your questions today.

Wai-Yew “Andrew” Lam, Founder.

Adelphi Retirement Management, Inc.

Are we able to retire at 62?

Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they’re hoping to retire. Starting in January this year, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years. The boomers, who in their youth revolutionized everything from music to race relations, are set to redefine retirement. But a generation that made its mark in the tumultuous 1960s now faces a crisis as it hits its own mid-60s.

The situation is extremely serious because baby boomers have not saved very effectively for retirement and are still retiring too early in my view. Here are some reasons that are of concerned:

• The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.

• Reliance on stocks in retirement plans is greater than ever; 42 percent of those workers now have 401(k)s. But the past decade has been a lost one for stocks, with the Standard & Poor’s 500 index posting total returns of just 1 percent since the beginning of 2000.

• Many retirees banked on their homes as their retirement fund. But the crash in housing prices has slashed almost a third of a typical home’s value. Now 22 percent of homeowners, or nearly 11 million people, owe more on their mortgage than their home is worth. Many are boomers.

John Smith, 61, of San Diego, CA, is paying the price for being a boomer who enjoyed life without saving for the future. He put a daughter through college, but he also spent plenty of money on indulgences like dining out and the latest electronic gadgets.

Smith was laid off last January from his $100,000-a-year job as a sales executive for a mortgage company. And with savings of just $5,000, he’s on a budget for the first time. In June, he will start taking Social Security at age 62.

“If I’d been smarter and planned and had the bucks, I’d wait until 70,” says Smith, who is divorced and rents an apartment. “It’s my fault. For years I was making plenty of money and spending plenty of money.”

Unfortunately, Smith is in the majority. Some 51 percent of early boomer households, headed by those ages 55 to 64, face a retirement with lower living standards, according to a 2009 study by the Center for Retirement Research at Boston College

Too many boomers have ignored or underestimated the worsening outlook for their finances. By far the greatest shortcoming has been a failure to save. The personal savings rate — the amount of disposable income unspent — averaged close to 10 percent in the 1970s and `80s. By late 2007, the rate had sunk to negative 1 percent.

The recession has helped improve the savings rate — it’s now back above 5 percent. Yet typical boomers are still woefully short on retirement savings. Even those in their 50s and 60s with a 401(k) for at least six years had an average balance of less than $150,000 at the end of 2009, according to AARP.

Signs of coming trouble are visible on several other fronts, too:

• Mortgage Debt. Nearly two in three people age 55 to 64 had a mortgage in 2007, with a median debt of $85,000.

• Social Security. Nearly 3 out of 4 people file to claim Social Security benefits as soon as they’re eligible at age 62. That locks them in at a much lower amount than they would get if they waited.

The monthly checks are about 25 percent less if you retire at 62 instead of the full retirement age, which is 66 for those born from 1943 to 1954. If you wait until 70, your check can be 75 to 80 percent more than at 62. So, a boomer who claimed a $1,200 monthly benefit in 2008 at age 62 could have received about $2,000 by holding off until 70.

• Medical Costs. Health care expenses are soaring, and the availability of retiree benefits is declining.

As we see it, most people cannot fathom how much money will be needed to simply cover out-of-pocket medical care costs.

A 55-year-old man with typical drug expenses needs to have about $187,000 just to cover future medical costs. That’s if he wants to be 90 percent certain to have enough money to supplement Medicare coverage in retirement, the AARP said. Because of greater longevity, a 65-year-old woman would need even more to cover her health insurance premiums and out-of-pocket health expenses: an estimated $213,000.

• Employment. Boomers both need and want to work longer than previous generations. But unemployment is near 10 percent, and many have lost their jobs.

The average unemployment period for those 55 and older was 45 weeks in November. That’s 12 weeks longer than for younger job-seekers. It’s also more than double the 20-week period this group faced at the beginning of the recession in December 2007.

These financial neglect turns out to be many boomers’ undoing, challenging circumstances are stymieing others. If you have a crisis where the adverse consequences are immediately clear, then people understand that they have to do something, when the consequences will be felt 20 or 30 years in the future, the temptation is that we kick the can down the road.

For less affluent boomers, it won’t take that long to feel the pain of poor planning. Concerns about financial trouble will hang over many of those 65th birthday celebrations in 2011.

Many seem to view their plight through rose-colored granny glasses. An AARP survey last month of boomers turning 65 next year found that they worry no more about money than they did at age 60 — before the recession or the collapse of home prices. But in an acknowledgement of reality, 40 percent said they plan to work “until I drop.”

For many years, Adelphi Retirement Management Inc. have been mentoring and helping thousands of investors to take charge of their retirement destiny. Call us today and let us help you and put you back on a fiscally sound plan to retire using Self-directed IRA investing.

It is never too late, and always take control of your retirement. Visit us at www.AdelphiRetirement.com or email us info@adelphiretirement.com with your questions.

Wai-Yew “Andrew” Lam, Founder

Adelphi Retirement Management, Inc.

10 retirement myths to address.

When it comes to retirement, Americans have high anxiety with our three-lane highway of Social Security, retirement savings, and a traditional pension all full of potholes. There are many unknown factors when it comes to retirement, especially if your proposed retirement date is a decade or more away. Though we can’t predict the future, we can dispel some myths that make retirement planning seem more daunting than it really is. Here are ten retirement myths to look out for.

1.     You don’t make enough money to save for retirement. This common excuse for not investing is true for some people, but it’s a myth for many of the people who use it. The truth is that many people simply live beyond their means. If you want to save money for retirement, you need to make it a priority by including it in your budget and paying yourself first through payroll deductions or other automatic payments.

2.     You need a large income to become wealthy. False. You need to consistently spend less than you earn and invest the difference to become wealthy. Even someone with a modest income can become a millionaire when they save diligently and invest wisely over a long period of time.

3.   You will earn 11 percent in the stock market every year. The statement, “Past performances do not guarantee future returns,” is featured prominently on just about any investment prospectus. The stock market as a whole returned approximately 0 percent over the last 10 years or so. Just take a look at the market over the last two decades. Solid returns can be had, but it’s a good idea to always diversify like opening a Self-directed IRA account.

4.     Your money is safer out of the market. The market took a beating over the last 10 years, and hasn’t gained much over the last decade or two. But how much would you have made if you left your investments in an online savings account? Very little. A balanced portfolio is the best way for most people to diversify their investments and gives them the best opportunity for growing their wealth. Opening a Self-directed IRA account to invest in real estate today we believe can pay off handsomely down the road. Keep it simple: Buy low and sell high over time, while enjoying rental income!

5. You can do better by investing with a professional money manager. Most people uses professional money managers to managed their retirement accounts, while some money managers have helped grow our retirement accounts over time, we strongly feel you need to diversify and invest in things you know. Never put all your eggs in one basket, as we navigate the post Madoff era. Most investors are better off splitting their investments into two one part in the stock market / mutual funds and the other in a Self-directed IRA account for an overall balanced portfolio.

6.     You need to be debt free before you can invest for retirement. This would be true in an ideal world, but most of us live in the real world. Focus on eliminating your high interest debt first, such as credit cards or personal loans. Then invest at least enough to get a company match on your 401(k), while continuing to work on repaying your remaining debt. Increase your investment contributions when you eliminate your remaining debts. The goal is to start now, not later.

7.      A 401(k) is the best place to invest for retirement. Many 401(k) plans have higher fees and fewer investment options than you can find by opening an IRA. That isn’t to say 401(k) plans are bad. They offer great tax advantages and an easy way to invest for retirement. It is usually best to invest enough to receive any matching contributions from your employer, than work on maxing out your IRA contributions. If you have additional funds to invest for retirement after you max out your 401K, then work on maxing out your IRA contributions.

8.     Social Security benefits will be enough to retire on. Very unlikely. Social Security was never designed to support someone for the duration of their retirement. The program was designed to supplement a retiree’s pension or other retirement savings. Social Security benefits should still be around when you retire, but don’t count on them being enough to cover all of your retirement expenses. Here are some tips on how to maximize Social Security benefits.

9. You have to retire at age ___. I’ll let you fill in the blank. 55? 65? 72? Now I’ll ask you, Why do you need to retire at a certain age? This myth exists because many retirees had to wait until a certain age to receive benefits from Social Security or a pension plan. The truth is that unless you work in an industry that has age limits, you should retire when you feel ready and can afford to do so

10. You won’t ever be able to afford to retire. Retirement isn’t a dream and it isn’t a destination. It’s a journey that most people can achieve through hard work and dedication. If you are a long way off, start planning now. If you are close to retirement but don’t think it is achievable, then rethink your definition of retirement. Perhaps you can work a few more years before retiring or work part-time in retirement.

In closing, feel free to contact me via email wlam@adelphiretirement.com or my direct number at 520-690-3138 to discuss your investment options.  For additional articles, please visit my blog below to explore all your investment options, empowering you to take control of your own retirement destiny.

 

Wai-Yew “Andrew” Lam, Principal.

Adelphi Retirement Management, Inc.

How to use your Self-directed IRA to invest in a business.

During our seminars and workshops that we’ve conducted, many of you have frequently posted us the following question – Can I use my Self-directed IRA to invest in an existing or start-up business?

The answer is YES! If you believe in a business and think it has the potential to be a long-term success, why not make an investment using your retirement plan.

As more and more people are putting retirement dollars into everything from startups and real estate to race horses. (Life insurance and collectibles are the only investments prohibited in an IRA.) Not surprisingly for many investors, stocks and bonds just don’t make sense these days, and they’re just more comfortable investing in things they know.

To be clear, this isn’t the same as borrowing money from your 401k, traditional IRA or your spouse’s retirement savings. Rather, this involves investing in a company’s stocks to protect it from capital gains. It is an underappreciated tool for allowing entrepreneurs and their friends to invest retirement funds into a company.

As usual, care must be taken to do this correctly and not violate the IRS regulations. Investing retirement funds into a viable business has been approved by the IRS since 1974. It is potentially a wise alternative you should consider. In fact, your siblings, friends and family members can all “pool” their IRA funds and co-invest in the same business and ensure their capital gains get favorable tax treatment.

Here’s how it works: You will first need to move your IRA funds into a self-directed IRA account using our services. Once established, you can now direct your IRA to make an equity investment into the new business.

Adelphi’s success story:

Four years ago, Jose Martinez a young entrepreneur decided to consolidate his old 401K and traditional IRA into a self-directed IRA ($25,000) and invested it in his brother’s taco truck restaurant business in Los Angeles. Today, the business has ballooned to 5 locations and is returning over $40,000 into his IRA account annually, not too shabby!

Other types of business investments: Some investors prefers to keep their investment simple, so lending their IRA funds via a private note into the business of their choosing is another option. While other investors only invest in accounts receivables of a business they know well etc. Alternatively, you can also invest in a business located in a foreign country. So as you can see, the opportunity to grow and diversify your IRA account is endless. Only a Self-directed IRA account will truly allow you to invest in things you know well all tax-free.

Careful planning:

The biggest risk is “self-dealing” which the IRS and Labor of Department prohibits. Here’s an example; Say you take $100,000 from your $300,000 IRA to buy property on which you hunt and fish. If the IRS finds out about your personal use of the land, the entire $300,000 could be considered distributed, and all the money subject to income tax and withdrawal penalty this tax year.

To learn more, just give us a call for a free consultation as we explore your investment options. For more information on Self-directed IRA account, please visit www.AdelphiRetirement.com.

For better understanding on how to fund a new or existing business, simply email me at  wlam@adelphiretirement.com or call us at 520-838-0851

 

Wai-Yew “Andrew” Lam, Founder.

Adelphi Retirement Management, Inc.

How to buy foreclosure homes without using traditional lenders.

Purchasing a foreclosure home as an investment property can be a very smart decision today. In the past twelve months, we’ve worked with many of our savvy investors utilizing their Self-directed IRA accounts to do just that. There are many great buys currently on the market today and our investors believe that it will ultimately bear a lot of financial promise for them over the long term.

Lending environment today: Many credit-worthy borrowers are suffering a housing loan hangover precipitated by historically lax lending standards due to the financial and stock market crash of the past few years. In 2006, chicanery driven by avarice infected the mortgage industry food chain: Many mortgage brokers pushed risky loans, borrowers lied about their income, appraisers inflated home values, lenders originated shaky mortgages, Wall Street firms bundled them into securities and sold them, and rating firms characterized them as safe investments. As we all now know, the rest is history.

Higher standards: When it comes to buying investment properties, investors needing to borrow a loan must have excellent credit, a larger down payment (typically over 50%) and a high percentage of income to debt ratio before the loan is approved. We are seeing a complete reboot of the mortgage lending system in this country. So where can investors turn do to borrow and invest in these properties today? The answer is simple, using your own retirement funds called Self-directed IRA.

What is Self-directed IRA?: Self-directed IRA is the same as a Traditional IRA, except that this account allows you to invest in non-traditional investments like real estate, business, mortgage notes, tax lien, private note and many more – to learn more please visit: www.AdelphiRetirement.com. Unbeknown to many, the IRS and Congress passed the law called ERISA Act, which allows investors to take control of their own investments since 1974 (http://en.wikipedia.org/wiki/Employee_Retirement_Income_Security_Act).

Unfortunately, financial advisors only invest our retirement funds in stocks and mutual funds to earn commissions paid to them annually from the Mutual funds companies at our expense. Ironically, moving our retirement funds into Self-directed IRAs to diversify is not in their best interest as they will not get paid to do so.

How to utilize Self-directed IRA to buy real estate: Here’s how it can work for you. Say you currently have $120K saved in your Traditional IRA or an old 401K account. All you need to do is to “convert” this existing account over into a Self-directed IRA when you open an account with us. Once established, it is treated by the IRS as a rollover and there will not be any taxes, or penalties whatsoever to you. This entire process usually takes up to 6 weeks.

Now that the account is opened, you have complete control on what you can invest! Coming back to the foreclose investment; you could use your Self-directed IRA funds to purchase the property all cash, part cash and part personal funds, co-invest with your family members, partners, and friends etc. The opportunity is endless. You can do so without having to deal with any lenders, period. In a nut shell, you are using your Self-directed IRA to invest in real estate, moving away from stocks and mutual funds, essentially eliminating the services of your financial advisor.

In closing, there are many options available to you today to invest in real estate; we will share these “secrets” with you. Feel free to contact me via email atwlam@adelphiretirement.com or my direct number at 520-690-3138. We can explore all your investment options, empowering you to take control of your own retirement destiny.

 

Wai-Yew “Andrew” Lam, President.

www.AdelphiRetirement.com