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Do You Have a 401(k) at a Former Employer? You can roll it over into a self-directed IRA

Do You Have a 401(k) at a Former Employer? You can roll it over into a self-directed IRA

According to the Investment Company Institute’s 401(k) Center, 401(k) plans held $6.3 trillion in assets as of September 30, 2022. The assets were in more than 625,000 plans on behalf of approximately 60 million active participants and millions of former employees and retirees. 

Further, the savings that were rolled over from 401(k)s and other employer-sponsored retirement plans represented about half of the $11.0 trillion held in individual retirement account (IRA) assets as of September 30, 2022.

However, there are many inactive 401(k) plans that have been left behind when employees left their jobs.

 

Taxpayers who are leaving their accounts at a former employer are leaving a lot of money on the retirement savings table!

 

Leave the job, take the 401(k) assets

If you choose to go to another employer or decide to retire, there is no reason to leave your old plan behind and let it go inactive. Think of all the opportunities you’ll miss to rebalance your portfolio or add to your retirement savings. Plus, you’ll pay administrative fees and penalties for an inactive account—and risk losing your retirement savings as a “missing participant” if your former employer is unable to find you due to outdated contact information.

You can merge the funds with the 401(k) at your new job if one is offered; cash out the old 401(k) if you need the money immediately; or roll over the funds into a self-directed IRA and take advantage of the broad array of alternative assets a self-directed retirement plan allows.

 

What happens with a rollover?

Unlike a transfer (which moves funds between two similar retirement accounts), a rollover moves assets between two different kinds of retirement accounts, such as from a 401(k) or another qualified plan into an IRA.

If you have an old 401(k) and you want to roll over the funds into a new self-directed IRA, you must notify the previous financial institution of your plans and complete the required paperwork to move the funds to the new custodian.

The financial institution that is sending the funds must file IRS Form 1099-R, which tells the IRS money is moving between the two different types of accounts and that there may be a temporary distribution. The institution that is receiving the funds (the IRA custodian) will file Form 5498. You must note the rollover on your tax return.

The same amount of funds must be rolled over from the former to the new account. There are no tax triggers when this is done correctly.

The rollover may be direct or indirect.

As always, we recommend you discuss this with a trusted financial advisor to make sure you conduct the rollover in the best way possible for your specific tax scenario.

 

Lost track of your old plan? Here’s how to find it.

Before you initiate a 401(k) rollover, contact the human resources department of your previous employer or check old account statements to get all the information you need to start the transaction.

If that leads nowhere, search for your lost plan on the National Registry of Unclaimed Retirement Benefits, or search the database available through the National Association of Unclaimed Property Administrators. The U.S. Department of Labor also has an abandoned plan database.

Open a self-directed IRA with Next Generation

As a full-service administrator and asset custodian for self-directed retirement plans, Next Generation is here to help. You can open a new self-directed IRA and follow the steps in our starter kits to implement a rollover from your old 401(k) into your new plan. You can build a more diverse portfolio with alternative assets you know and understand—and include real estate, precious metals, royalties, private equity funding, commodities, and many more nontraditional investments to grow retirement wealth. We offer a complimentary educational session to review the many options and benefits that self-direction allows, and our team will ensure that your rollover is conducted in accordance with IRS guidelines. Contact us with any questions you have.

Jaime Raskulinecz, CEO of Next Generation Trust Company, Shares the Importance of Using a Custodian that Specializes in Alternative Assets When Executing Certain IRA Rollovers

Article Details How One Celebrity Ended Up With a Costly Deficiency and IRS Penalties Due to Failure to Report IRA Assets’ Fair Market Value and Properly Transfer a Non-Publicly Traded Hedge Fund Partnership

ROSELAND, NJ, November 15, 2023 /24-7PressRelease/ — Even wealthy celebrities who can afford top financial advisement get caught in the IRS’s crosshairs for faulty rollovers and failure to report the fair market value (FMV) of alternative assets within their retirement plans, as detailed in a recent article by Jaime Raskulinecz, CEO of Next Generation Trust Company.

The estate of the late actor James Caan lost its case in tax court in October, in a matter that began in 2015. At issue was an IRA rollover of a partnership interest in a hedge fund. The asset was distributed to another retirement account at a different brokerage house, a transaction that Caan claimed was a nontaxable event. However, the U.S. Tax Court determined that his estate owed nearly $936,000 due to a deficiency and accuracy penalty associated with an incorrect IRA rollover of the alternative asset.

That’s because the hedge fund interest was liquidated eventually a year later, and the cash was ultimately “rolled over” to the new custodian. However, to qualify as a rollover, the exact asset (the hedge fund interest) is what should have been transferred to the successor custodian.

In addition to the incorrect transfer of the non-publicly traded hedge fund, Caan and/or his financial management team had failed to provide the IRA’s fair market value back in 2015, which is required by the IRA of the retirement plan’s trustee or custodian. Because the custodian must file Form 5498 regarding the fair market value of the assets within each client’s IRA, and because Mr. Caan’s team did not provide the required information, the custodial agreement was terminated.

“This is a complicated issue but at its core, the two-prong failures of Mr. Caan’s custodians/brokerage firms and financial team—to report the assets’ fair market value timely and execute a rollover correctly and within the proscribed 60-day time frame—provide a cautionary tale for investors,” said Raskulinecz. “For individuals with self-directed IRAs—which may include a variety of alternative assets such as investments in hedge funds—it is crucial that they work with a custodian that specializes in these types of retirement accounts and the nontraditional investments they allow.”

Raskulinecz added that as an administrator and custodian of self-directed retirement plans, Next Generation sends reminders to all clients to provide the updated FMV on the assets held within their accounts (as of December 31st of the year) so that the firm can file Form 5498 with the IRS. The firm also ensures that IRA rollovers of assets in kind are done correctly, that the successor custodian is aware that it is a non-publicly traded asset to ensure they will accept it, and that the transaction is completed within the proper time frame to avoid IRS penalties.

To read the details about Caan’s case, go to https://bit.ly/49zL4Ay. For more information about self-directed IRAs, visit www.NextGenerationTrust.com.

About Next Generation Trust Company, LLC
Founded on the philosophy that every person should have control over their retirement plans, Next Generation educates consumers and professionals about self-directed retirement plans and nontraditional investments, a strategy at one time reserved only for the very wealthy. Next Generation Services provides comprehensive account administration and transaction support, and its sister company, Next Generation Trust Company, acts as custodian for all accounts. The neutral third-party professionals at Next Generation expertly guide clients and their trusted advisors as part of their white glove, personalized service for a seamless transaction experience from start to finish. For more information, visit www.NextGenerationTrust.com, or contact Next Generation at 888.857.8058 or NewAccounts@NextGenerationTrust.com.

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A Word of Caution for Self-Directed Investors: Use a Custodian That Specializes in Alternative Assets

The late actor James Caan found himself in a tax tangle in 2015 that his estate has been fighting . . . and lost last month. At issue was an IRA rollover that Mr. Caan claimed was a nontaxable event. It wasn’t.

His IRA at one financial institution held a partnership interest in a hedge fund. Those funds were distributed to another retirement account at a different brokerage house. Mr. Caan, who passed away last year, was hit with a deficiency and an accuracy penalty of nearly $936,000 three years later. He and subsequently his estate challenged this, but in October of this year, the U.S. Tax Court determined that his estate owed the money to the IRS.

The matter centered on two issues:

It is a somewhat complicated issue. Here’s an outline of what happened.

Even wealthy celebrities who can afford top financial advisement get caught in the IRS’s crosshairs for faulty rollovers and failure to report the fair market value (FMV) of alternative assets within their retirement plans—which is required by the IRS of the retirement plan’s trustee or custodian.

 

Avoid IRS Problems and High Penalties. Use an IRA Custodian That Specializes in Alternative Assets.

In Mr. Caan’s case, the two-prong failures of his custodians/brokerage firms and financial team provide a cautionary tale for investors. The failure to report the FMV of his IRA’s partnership holdings led the original brokerage firm to issue its distribution notice based on the asset’s last known value, which was from the prior year. Also, because his financial team did not provide the year-end FMV timely, the brokerage firm ended its custodial relationship with him.

Further aggravating the problem, the alternative asset held in the IRA (the hedge fund partnership interest) was not eligible for the transfer through the Automated Customer Account Transfer Service, which is used by brokers to transfer stocks, bonds, cash, unit trusts, mutual funds, options, and other investment products. Instead, the financial advisor directed the fund to liquidate the holdings and transfer the cash proceeds to the new IRA—which did not take place until nearly a year after the distribution notice was sent out. This was far afield of the 60-day rollover period for IRA distributions.

At Next Generation Trust Company, we know the importance of reporting the FMV of the alternative assets within our clients’ self-directed IRAs. As an administrator and custodian of self-directed retirement plans, we are required to file Form 5498 annually; to do so, we send reminders to our clients to provide us with the updated FMV on the assets held within their accounts. Form 5498 reports the fair market value of the IRA as of December 31st of every year to clients and the IRS. You can read more about FMVs and Form 5498 on our blog.

If you plan to execute an IRA rollover of assets in kind, our team has the industry knowledge to make sure:

1 – that you are doing the rollover correctly,

2 – the successor custodian is aware that it is a non-publicly traded asset to ensure they will accept it, and

3 – that the transaction is completed within the proper time frame to avoid IRS penalties.

As Mr. Caan’s story tells us, if the brokers/custodians understood how to deal with these non-publicly traded assets and his financial team understood the ramifications of not getting the FMV reported—as well as the intricacies of executing an IRA rollover when alternative assets are involved—the prolonged and expensive legal battle could have been avoided.

Jaime Raskulinecz, CEO of Next Generation Trust Company, Shares Updates on Who Qualifies as an Accredited Investor in Recent Forbes Council Article

Raskulinecz Outlines Congressional Bills and SEC Rulings That Seek to Widen Accredited Investor Pool; Private Equity Funding & Other Alternative Assets Allowed in Self-Directed Retirement Plans Would be Available to More Investors as a Result

ROSELAND, NJ, November 06, 2023 /24-7PressRelease/ — Jaime Raskulinecz, CEO of Next Generation Trust Company, has published an article about potential changes regarding who qualifies as an accredited investor titled “Accredited Investors: Who’s In, Who’s Not.” She is a thought leader on the Forbes Finance Council and provides information and guidance about self-directed retirement plans and related matters.

Historically, accredited investors are relatively high-net-worth individuals who must earn an annual income of at least $200,000 for the previous two years or $300,000 for married couples; and have a net worth, excluding primary residence, of at least $1 million in assets.

“Those criteria did not factor in an individual’s knowledge or understanding of investments or personal finances until certain SEC amendments passed in 2020 broadened the accredited investor definition beyond income to be based on ‘established, clear measures of financial sophistication’ as well,” said Raskulinecz.

Accredited investors and self-directed retirement plans

Accredited investors can make investments in non-registered private equity (in startups and early-stage companies), equity crowdfunding, venture capital, private placements, and hedge funds—all popular asset classes for the self-directed investors Next Generation works with. However, the income and net worth criteria overlook savvy investors who know and understand many types of alternative assets, which individuals may include in their self-directed retirement plans.

Potential expansions of accredited investor definition

As outlined in the article, there are several legislative bills that have been proposed since June 2023 as well as criteria reviews by the SEC, such as:

• The Equal Opportunity for All Investors Act, enabling more people to invest in more complex investment vehicles after passing a special securities test.

• The Accredited Investor Definition Review Act, in which the SEC would review the accredited investor criteria every five years and give regulators the authority to revise the criteria as they see fit.

• The Fair Investment Opportunities for Professional Experts Act would give certified broker-deals, investment advisors, and others with specific licenses or experience accredited investor status.

“Given that self-directed investors are expected to do their research and due diligence about any asset they wish to include in their plan, I look forward to seeing what changes will be implemented to enable more individuals to include equity funding along with the many other types of alternative assets allowed in self-directed IRAs and other plans,” said Raskulinecz.

The Forbes Council article is at https://bit.ly/40nEEAm. For more information about self-direction as a retirement savings strategy, visit www.NextGenerationTrust.com.

About self-directed IRAs

Self-directed IRAs allow investors to include investments in many alternative assets—such as real estate, precious metals, private equity funding, and royalties—within their tax-advantaged plans. Account owners may self-direct Traditional and Roth IRAs, SEP and SIMPLE IRAS, education savings accounts, and health savings accounts. Self-directed solo(k) plans are another option for business owners. Self-directed retirement plans are offered by specialty custodians, as most traditional broker-dealers and financial institutions don’t allow non-publicly traded investments.

About Next Generation Services, LLC

Founded on the philosophy that every person should have control over their retirement plans, Next Generation educates consumers and professionals about self-directed retirement plans and nontraditional investments, a strategy at one time reserved only for the very wealthy. Next Generation Services provides comprehensive account administration and transaction support, and its sister company, Next Generation Trust Company, acts as custodian for all accounts. The neutral third-party professionals at Next Generation expertly guide clients and their trusted advisors as part of their white glove, personalized service for a seamless transaction experience from start to finish. For more information, visit www.NextGenerationTrust.com or contact Next Generation at 888.857.8058 or NewAccounts@NextGenerationTrust.com.

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Private Real Estate Investing Through a Self-Directed IRA

Investment property has long been popular among self-directed investors and the private real estate asset class is gaining popularity among self-directed IRA account owners.

 

Investing in private real estate funds within your self-directed IRA is a great way to diversify your retirement portfolio and build a long-term investment that earns passive income. Read on to learn more about private real estate investing.

 

How Do Private Equity Real Estate Funds Work?

One way to think about a private equity real estate (RE) fund is simply a group of people pooling their money to invest in a specific property or multiple properties. Private real estate funds are professionally managed pooled private and public investments in real estate markets. The assets may be multifamily properties, office buildings, warehouses, even student housing and retirement communities. Investing in these alternative assets has the potential for high returns as a source of passive income.

 

As with any nontraditional investment, individuals who wish to invest in private real estate funds through their self-directed IRA should do their due diligence and research the fund and its holdings as well as the investment manager (the sponsor) before sending investment instructions to the self-directed IRA administrator.

 

Private REITs as Self-Directed Investments

Real estate investment trusts (REITs) also comprise commercial real estate investments and generate revenues through rental incomes from the portfolios’ holdings. There are public and private REITs.

 

Publicly traded REITs are companies whose shares trade on major stock exchanges like NASDAQ. Anyone can invest in these REITs. They are registered with the SEC and as such, are subject to the same regulatory compliance issues as other publicly traded companies. They are also subject to supply & demand pressures of the market.

 

Private REITs are not listed on a major exchange and are not subject to most SEC regulatory requirements. Their valuation is based on appraisal of the asset. Since public REITs are not vulnerable to the same market pressures as public RIETs, they offer good portfolio risk protection as well.

 

Although private REITs are typically available only to accredited and institutional investors, self-directed IRAs can invest in these entities they are not publicly traded assets. Non-traded REITs can be an excellent source of passive income because by law, these entities must distribute at least 90% of their taxable income to shareholders as dividends, giving them the potential to provide a steady income stream (and long-term gains) for investors.

 

Investing Through Real Estate Crowdfunding Platforms

RE crowdfunding is a way to raise money online from a large pool of investors for real estate acquisitions. Individuals and businesses can use crowdfunding to access capital from a larger group of potential investors through the Internet and social media. Plus, crowdfunding makes opportunities to invest in real estate accessible to more people. The benefits of RE crowdfunding include liquidity and the potential for high returns. 

 

NOTE: In addition to investing in a private REIT, a private real estate equity fund, or a real estate crowdfunding platform, your self-directed IRA can also partner with another such retirement plan to purchase a specific investment property, with terms worked out between account owners.

 

If you have questions about how investing in private real estate funds and or real estate crowdfunding works through self-direction, you can schedule a complimentary educational session with one of Next Generation’s team members. As a full-service self-directed IRA administrator and asset custodian, we are committed to client education and helpful experts can explain the ins and outs of self-direction as a retirement wealth-building strategy. Contact us by email at NewAccounts@NextGenerationTrust.com or call us at 888.857-8058 with your questions.

 

 

Unlocking the Power of Self-Directed IRAs: A Guide to Choosing Your Own Investments

Do you have a self-directed IRA account? Did you know that with it comes the power to choose your own investments? What does it all mean and what’s the best way to navigate it? Jack Malpass, Business Development Specialist at Next Generation Trust Company, recently had the opportunity to discuss just that on Naked Notes, a podcast by The Note Assistance Program focused on investing in the secondary mortgage market.

A self-directed individual retirement account (SDIRA) is a type of retirement account that allows you to invest in a wider range of assets compared to a conventional IRA, where the account custodian usually limits you to approved asset types. Put in simple terms, an SDIRA empowers you to make investment decisions on your own terms. This allows you to invest in your area of expertise, while diversifying your retirement portfolio and hedging against stock market volatility. SDIRAs are beneficial for investors at any age – if you have qualified retirement income you can set up an account and start earning passive income now.

Some examples of investments that can be held in a self-directed IRA include:

Just like any financial decision, however, self-directed investing through alternative assets requires upfront research and due diligence. Selecting the right SDIRA custodian is critical. A reputable SDIRA firm, like Next Generation Trust Company, can support you in your self-directed investment journey by providing thorough record-keeping, maintaining mandatory reporting, and handling transaction support. With a variety of account options and a dedication to white glove customer service, we can ensure you have the tools and support necessary to control your financial future.

You can learn more about SDIRAs by listening to Jack’s complete interview with Naked Notes here. If you’re interested in exploring the world of self-directed retirement planning, Next Generation Trust Company is here to help. Please contact us today to get started.

Gen Z Is Guessing What They’ll Need For Retirement (In The Wrong Direction)

Is Generation Z saving enough for retirement? The answer is complicated. According to a new survey from Northwestern Mutual, people in their 20s expect to need just $1.2 million to retire comfortably versus $1.56 million for people in their 50s. Gen Zers (born between the mid-1990s and mid-2010s) believe they will retire earlier (age 60) compared to millennials and Gen Xers, who plan to work until age 63 and 65, respectively. Despite all this, Gen Z members believe they will be financially prepared for retirement.

How much do people need to save for retirement?  Of course, that depends on how much one needs for monthly living expenses and lifestyle preferences. “If someone wanted to live off $4,000 a month after taxes for 40 years—taking into account 3% inflation and a return on invested retirement funds of 6%—they would need somewhere closer to $4 million,” said Linda Farinola, founder of Princeton Financial Group. This is far above what the Gen Z cohort expects to need.

 

Why is Gen Z underestimating retirement savings?

Age and lack of financial education are essential factors. So are major life events, such as marriage, starting a family, or buying a home, which they have yet to pursue.

Also, for many Gen Zers, money is not a driving factor in their careers. Nearly two-thirds (64%) said personal fulfillment is more important in a job than money (36%). It makes sense that this attitude about money and the workplace crosses into their retirement savings plans.

So what’s the key to encouraging Gen Zers to save for retirement?

Remember that this generation has different values, financial goals, and life experiences (and expectations), so alternative options for retirement savings speak to their interests. That includes saving for retirement with a self-directed IRA.

 

Gen Z: Enhance your retirement readiness with a self-directed IRA

A self-directed IRA can help younger workers build a diverse retirement portfolio beyond stocks, bonds, and mutual funds by including alternative assets such as real estate, precious metals, royalties, natural resources, NFTs, and other nontraditional investments. Gen Zers will be happy to know that these alternatives enable them to invest over the long term in assets they know and understand, and that support their eclectic interests.

Because those assets’ performance is not correlated with the stock market, they’re shielded against market volatility. This is especially important in our current financial environment. Plus, self-directed IRAs enjoy the same tax advantages as their regular counterparts (with lots more investment flexibility).

A note to young investors: self-direction means you’re taking control of your investment decisions. So do your homework, research your investments, and be sure you are making informed decisions. Another note: tap into the resources and guidance available from the team at Next Generation.

Next Generation provides comprehensive account administration, transaction support, and asset custody for our clients’ self-directed IRAs. We also offer many educational materials for investors to learn at their own pace with our webinars and white papers. You can also schedule a complimentary educational session with a Next Generation representative who will answer your questions about the many options available through these plans, tailored to your specific interest(s). You can always reach us directly by calling us at 888.857.8058 or emailing NewAccounts@NextGenerationTrust.com.

How Prepared is Gen X for Retirement? Not so much.

The generation right behind the baby boomers, Generation X, is between 43 and 58 years old (born between 1965 and 1980). Therefore, the oldest Gen Xers are near retirees while the younger cohort still has lots of time to save, invest, and plan for retirement.

However, Northwestern Mutual’s 2023 Planning & Progress* study revealed that a little more than half (55%) of Gen X predict they will not be financially prepared for retirement—more than any other age group. They were also more likely to resist retirement planning than the other age groups; 38% of Generation X members shared that they had not looked for retirement information at all nor spoken to a financial advisor. They rated their financial security an average of 5.6 out of 10.

Gen X needs to save more. A lot more.

The figures Gen X provided to Northwest Mutual about what they need for retirement vs. what they’ve saved also reflect this lack of preparation.

According to the study, Generation X respondents plan to work until age 65 (71 for baby boomers). The youngest workers, Gen Z, expressed the most confidence that they will be financially prepared when the time comes to retire. They also plan to retire by age 60. We admire that confidence!

More sobering statistics about Gen X’s retirement readiness

Prudential Financial, Inc.’s research survey, Gen X: Retirement Revised** also points to fears among Gen X that they won’t have enough saved for retirement, and haven’t done retirement planning.

They are also concerned about how inflation is affecting their savings goals and almost three-quarters of respondents said the current economic environment makes it hard to plan financially beyond their daily needs. Almost one-third (29%) fear being replaced by younger workers.

This lack of a retirement strategy and retirement savings for projected long-term expenses lays out a dicey financial landscape.

Gen X—take control of your future with a self-directed IRA!

There’s time to catch up on retirement savings—and give those savings a boost by opening a self-directed Traditional or Roth IRA. Thanks to a provision in the SECURE Act of 2019, there is no longer an age restriction to open one of these retirement accounts. You can fund your new retirement plan with a relatively small amount to get started . . . or roll funds over from an existing IRA or eligible employer-sponsored retirement plan. As long as you have earned income, you can contribute to your self-directed IRA (before the passage of the SECURE Act, the age limit for contributions was 70 ½).

Plus, self-directed IRAs are ideal for people who know and understand alternative assets such as real estate, precious metals, commodities, tax liens, private equity funding, and many more. If that sounds like you, you can put the power of your investing knowledge into growing your retirement savings through a tax-advantaged self-directed IRA. You do your due diligence about the alternative assets you wish to include, develop a more diverse retirement portfolio, and control your investments as a self-directed investor.

As a full-service self-directed retirement plan administrator, Next Generation Trust Company handles all the account administration and holds the assets. Our team will vet your transactions to ensure they meet IRS guidelines for these accounts, and we provide excellent client education about the many options and benefits of self-direction as a retirement strategy.

Whether you’re 25, 35, 45, or 55, it’s always the right age for individuals with earned income to take control of their future with a self-directed IRA. Need to learn more? Sign up for a complimentary education session or check out our on-demand webinars at your convenience. You can always contact us with questions at NewAccounts@NextGenerationTrust.com or 888.857.8058.

 

 

 

*Northwest Mutual’s annual research study explores U.S. adults’ attitudes and behaviors toward money, financial decision-making, and issues concerning their long-term financial security. The 2023 study gathered data online from 2,740 adults which included 640 Gen Xers. https://news.northwesternmutual.com/planning-and-progress-study-2023

** The Prudential Pulse survey was among 2,000 pre-retiree U.S. Gen Xers. The sample includes 1,717 occupied/working Gen Xers, those currently working full- or part-time, seeking work, or studying. The interviews were conducted online, and quotas were set to reflect a nationally representative population based on age, gender, race/ethnicity, educational attainment, and region. https://news.prudential.com/generation-x-confronts-harsh-new-reality-retirement-unreadiness.htm

 

 

Jaime Raskulinecz, CEO of Next Generation Services, Shares SECURE Act 2.0 Changes That Affect Retirement Plans

Provisions Concern Required Minimum Distributions and Opportunities for Roth Features in Workplace Retirement Plans, Including Self-Directed SEP IRAs and SIMPLE IRAs

ROSELAND, NJ, September 15, 2023 /24-7PressRelease/ — Provisions in the SECURE Act 2.0, signed into law late last year, affect retirement plans in several ways, including required minimum distributions (RMDs). As Jaime Raskulinecz, CEO of Next Generation Services pointed out, these changes affect owners of self-directed IRAs the same as they do investors with traditional retirement plans.

“Among the big changes is the higher age at which retirement plan account owners must begin taking required minimum distributions from their IRAs,” noted Raskulinecz, whose firm administers self-directed retirement plans. “The SECURE Act of 2019 increased that age to 72 and SECURE 2.0 upped it to 73. This is good news for taxpayers who do not yet need to pull that retirement income from their accounts, as they can let the investments grow in value in tax-advantaged accounts.”

Additional changes involve returning erroneous RMDs in 2023 that could have been delayed until next year, reduced penalties for a missed RMD, and some penalty waivers for certain beneficiaries of inherited IRAs.

Self-directed IRAs allow investors to include investments in many alternative assets—such as real estate, precious metals, private equity funding, and royalties—within their tax-advantaged plans. Next Generation provides comprehensive account administration and asset custody for its clients who self-direct their retirement portfolios. Account owners may self-direct Traditional and Roth IRAs, SEP and SIMPLE IRAS, education savings accounts, and health savings accounts. Self-directed solo(k) plans are another option for business owners.

In addition to the provisions regarding RMDs, SECURE 2.0 has expanded opportunities for Roth features in workplace retirement plans, including SEP IRAs and SIMPLE IRAs; 529 plans; and Roth contributions for certain 401(k) plans.

“These Roth features affect annual contribution limits and catch-up contributions, which account owners must be aware of. Plus, given the prevailing inflation rates, the IRS has increased the contribution limits for IRAs and qualified workplace retirement plans, which includes solo(k) and other self-directed retirement plans.”

You can read about these and other SECURE 2.0 provisions affecting retirement plans at https://bit.ly/46aEoq5. For more information about self-direction as a retirement savings strategy, visit www.NextGenerationTrust.com.

About Next Generation Services, LLC
Founded on the philosophy that every person should have control over their retirement plans, Next Generation educates consumers and professionals about self-directed retirement plans and nontraditional investments, a strategy at one time reserved only for the very wealthy. Next Generation Services provides comprehensive account administration and transaction support, and its sister company, Next Generation Trust Company, acts as custodian for all accounts. The neutral third-party professionals at Next Generation expertly guide clients and their trusted advisors as part of their white glove, personalized service for a seamless transaction experience from start to finish. For more information, visit www.NextGenerationTrust.com, or contact Next Generation at 888.857.8058 or NewAccounts@NextGenerationTrust.com.

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