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Depending on the type of IRA that you own, there are many investment options available. In today's volatile economic world, it is important to know all your options so you can have a well diversified investment portfolio. Here 4 IRA investment options you probably didn't know about:
#1 – Purchasing real estate inside of your IRA
One of the most overlooked options for an individual retirement account is making a judicious purchase of real estate. Depending on the type of IRA that you have, you may be able to take advantage of many different tax advantaged situations in order to invest in real property.
A Roth IRA is the easiest way to convert cash holdings into real property. However, you must be sure that you undergo the correct protocol in order to protect yourself from the adverse effects of “benefiting yourself directly” from an IRA.
#2 – Overriding the personal annual IRA deposit limit by starting a business
It has been said that the personal annual deposit limits that are placed on IRA accounts keep people from getting rich. However, business owners have the ability to open more than one IRA account. Business owners also have the option to deposit a great deal more money into a business IRA than a personal one. Most rich people who have exhausted all of their tax deferred options for saving money have created a business for the sole purpose of opening these kinds of accounts.
Make sure that your business adheres to the federal and state standards of what a business should be. If your business is attached to a lifelong hobby or vocation, it makes that business much easier to qualify.
#3 – Rolling over IRA accounts into other types of investment accounts
If you are lucky enough not to need the distributions from your IRA when you are first able to take out money without penalty, you do not have to begin taking those distributions immediately. You can roll over the money into other accounts to continue receiving the tax free growth benefits of the investments that you have.
If you have procured new employment, rolling your IRA over into a new 401(k) may be the appropriate response. If you are retired, then you may want to roll over your IRA into another IRA or into a fixed investment account. Your options are plentiful as long as you do not directly receive cash from your account, otherwise known as a “direct benefit.”
Many people who do not ever need their IRA distributions will continue to roll over their IRA accounts until they pass them on to later beneficiaries.
#4 – Purchasing precious metal such as gold bullion coins or bars within an IRA
If your IRA has not been performing as well since the economic meltdown back in 2008, you may want to diversify your investment strategy. Purchasing precious metals such as gold, silver, palladium or platinum coins inside of an IRA is one of the best ways to protect the value of an IRA account while still leaving plenty of room for growth. In fact many Americans have been doing a Gold IRA Rollover in 2012 in an effort to hedge against market turbulence.
However, many people actually make purchases of gold coins inside of IRA accounts well before nearing retirement age. Recently, gold coins have expanded from a hedge investment into a full blown growth investment. Inside of an IRA, they gain the added benefit of creating a tax deferred incentive.