A recent article in U.S. News & World Report titled “Self-Directed IRA: Know the Risks Before Investing” laid out the basics of self-directed IRAs—what they are and the types of investments these retirement plans allow. Among the industry professionals quoted in the article is Jaime Raskulinecz, founder and CEO of Next Generation Services and Next Generation Trust Company.
Raskulinecz shared her perspective on the ideal self-directed investor and common errors investors make. As she described, self-directed IRAs are best suited for sophisticated investors who take the time to understand the regulations regarding the alternative assets allowed in these plans or those who work with an experienced financial advisor familiar with the alternative investment space. Self-directed IRAs enable investors to include a broad array of alternative assets within their plans, such as real estate, precious metals, private equity, secured and unsecured notes, and many more.
As for the common mistakes her firm sees, Raskulinecz noted that the biggest ones involve allowing a disqualified person to use a property owned by the IRA, using personal funds to add to an investment or do improvements, lending funds from an IRA to a friend or associate in order to personally take those funds and later claim it’s a bad loan, and making an investment without adequate due diligence. She also said there is potential for fraud when investors are lured into a transaction with a party that promises unrealistic or outsized returns or cannot provide adequate details about the investment.
“In a perfect world, more advisors would be familiar with this strategy and the rules of self-directed IRAs in order to add to their practice and help investors who might be less sophisticated, but could still benefit from the diversification,” she added in the article.
To read the full piece, click here.
For more information about self-directed IRAs, rules about disqualified persons, or alternative assets allowed through self-direction, go to 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.