Can you invest your IRA funds? Yes! You can.
Many retired people have been wrongly made to believe that they can’t. Who is responsible for this? The culprits are financial establishments, banks, brokerage houses, credit unions, etc. Why? They don’t stand to make money when you invest your IRA funds in homes. That’s why.
In fact, when you withdraw your IRA funds from investments they sell, they lose money! So, they fabricate stories and don’t allow you to invest your IRA in Real Estate, do not allow you to achieve your retirement goals, and do not allow you to make money in your golden age. These bankers and brokers even tell you that it is illegal! And they talk you into putting your money in investments which they do not sell – like stock market investments.
Very selfish of them! They do not want to lose money. OK. But do they have to go to the extent of being responsible for retired people working for a living? But, do not lose hope, take heart. You need not listen to them anymore. Invest in real estate. Check out with the IRS web site http://www.irs.gov/publications/p590/index.html. It clearly states that you can invest your IRA funds in Real Estate. Only life insurance and collectibles are not allowed to be invested.
A current home investor can have another source of capital for deals. Rehabs, pre-construction deals, rentals, etc. can now be funded with your IRA funds. You could also join hands with your reliable friends and relatives and make it a roaring business.
There is absolutely no limit in what all you can invest in. Supposing you do not know enough to invest in the real estate business, or you are plainly not interested in taking an active role in your investments, there are other possibilities. Invest in mortgages or tax liens, limited partnerships, etc.
There is the question about the $4,000 per year limit to your IRA. It does not apply to profits; only to contributions. The IRS allows your IRA to earn unlimited profits, every year. Investing IRA funds in real estate comes under the scrutiny of the IRS. Understandably, there are some restrictions too. Rules and prohibitions apply to investing IRA funds in real estate, as specified by the IRS. Say you own property. You cannot buy or sell this property you currently own to your IRA. Also you can’t invest in property and use it for your need, it must be for investment only.
Your IRA fund is your tax deferred retired money. Till your retirement, you are not supposed benefit from this fund. If money from this fund is utilized before the prescribed age limit, it would count as a withdrawal and would be subjected to penalties and taxes.
All these rules have not stopped many from achieving success in the real estate business using their IRA fund. With right guidance, you too can earn tax free real estate profits and monthly interest payments by investing in homes.