Nike Shox Torch 2 Let me tell you a quick story

Let me tell you a quick story. I was having coffee with my brother recently, and as usual, our conversation quickly turned into a competition. This time we were arguing over which retirement plans were better: self-managed IRAs or traditional IRAs? While we both agreed that it was crazy not to take advantage of using a savings plan to build wealth for retirement, I tried my best to convince my brother that the self directed IRA is the best way to go.



The truth of the matter is that before setting up ANY IRA, you need to ask yourself several important questions. The answers will ultimately put you on the path toward meeting your personal financial needs and goals.





Question 1:

Do you want to save and earn money that is tax deferred until retirement?

or

Do you want to save and earn money that has already been taxed and won't be taxed again?



If you answered, 搚es?to the first part of Question 1, then a traditional IRA would be an appropriate choice. You can save up to $5000 (in 2008), which can be deducted from your taxable income and you won't be required to pay taxes until you withdraw the money at retirement. At that time, applicable taxes would be due.



However, If you answered, 搚es?to the second part of Question 1, then you would set up a Roth IRA. The same maximum contribution ($5000) applies to a Roth. However, you are not allowed to deduct this amount from your taxable income. But since taxes have already been paid on the money you put into a Roth, you will have the benefit of taking that money, including earnings, out at retirement without having to pay taxes.



While my brother and I both agreed that a "yes" answer to both parts of Question 1 were equally preferable, we quickly diverged on Question 2.



Question 2:

Do you want trustees or counselors to handle the responsibility of investing your IRA?

or

Do you want to have a self managed IRA that allows you to control your own investments?



A 搚es?answer to the first part of Question 2 can be applied whether you set up a traditional or Roth IRA. With this option, you leave the investment of your retirement savings to the discretion of the trustee or financial institution.



However, in this case, their interests and goals are the deciding factor when it comes to choosing investments. You pay them exorbitant fees for their so-called "expertise" then sit back and hope that their decisions are going to make money for you.



My brother believes that this option is preferable since investing is "complicated" and should be left to the "experts." He is perfectly satisfied with his 8% annual return.



Of course, I argued for strongly for the second part of Question 2. There are many advantages to being in control of a self managed IRA. The main advantage is that you have the best of both worlds. I get to decide which assets I want my IRA to hold and the custodian handles the hassle of the paperwork, regulation compliance and report generation.



For example: I've always wanted to invest in real estate, but before I had a self directed IRA, my trustee would just "pooh-pooh" and otherwise discourage my interest. Now I抦 able to hold real estate assets, which have always been one of the safest assets to own. With the current condition of our economy, I can feel secure knowing that my investments in real estate are safe and not in danger of being lost with the next bank or investment house collapse.
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