Do You Have a Roth IRA Investing Plan?

I was sitting at home just relaxing the other Saturday night when the phone rang and when I picked it up a friend said, tell me Gordon, why should I have a Roth IRA? It turned out he had been having a discussion with his workmates and he seemed to have a mixed up version of what a Roth IRA actually was. Well this is what I told him.

You need a roth Ira investing vehicle because you make all your contributions out of money you have already paid tax on, you don't get a tax rebate on your contributions but after you have had the account five years or more, all the money you take out in your retirement is tax free, as are all the profits you make on your investments. You can only put $5000.00 in contributions into your IRA per year unless you are 50yrs old. Then you can put in another $1000.00 per year. A lot of people these days are putting their tax refund into their Roth IRA.

In my opinion you would be better of rolling your 401(k) over to a Roth IRA investing account and investing that money in real estate. Some companies recommend you invest your money in stocks and bonds, CDs and mutual funds. But if you want to go that way you may as well stick with your 401(k) and the miserly 8% these banks and stock brokers will pay you. If you want to be a smiling retiree like the ones I wrote about last week, then you will go the real estate way. Some of the additional advantages of investing in a Roth IRA Investing Plan, is no taxes on your investments ever, you utilize the power of compound interest, you are guaranteed asset protection, and last but not least, you can plan to leave your family secure in case anything happens to you.

If you do decide to invest in real estate, you can invest in some of the following, houses, commercial property, duplexes, townhouses, apartments and even bare land. I know one fellow that never had enough in his IRA, so he partnered with three other people to buy a warehouse. He has leased the warehouse out and he gets money paid into his Roth IRA investing balance sheet every month.

The Roth IRA is more lenient than some other retirement accounts, but you still have to follow the IRA rules, for example. If you don't follow the rules, this could lead to disqualification of the IRA, ie it stops being a IRA on the first day of the year that you engaged in a prohibited transaction. The account is then treated as though it distributed all the assets to you at fair market value. You will then be liable for taxes plus 10 per cent penalty.

The following are examples of prohibited transactions with a Roth IRA.
You cant sell property to it
You cant borrow money from it.
You can not buy property from one of your family or your wifes family.
You can not use your IRA as security for a loan.
You can not buy property for personal use, now or in the future.

So there I told my friend , thats the reason you need a Roth IRA, for freedom. Freedom in your retirement. I know I have said this before but it bears repeating, if you cannot be bothered with all these rules and regulations, there is a simpler more TURNKEY solution to investing for your retirement. Go to the url at the foot of this article, click on it and go to my website, there you will find more information on IRAs and real estate investments.