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What You Should Know About Retirement Planning With Trust Deed Investments


If you are currently in the process of Retirement Planning, you might be thinking about investments but you don’t want to make a bad one. Trust deed investments are a great way to invest your savings to make a profit that you’ll want to have when you retire.

Using funds from your IRA to invest in trust deeds is a great way to make a profit for your future because earnings accumulated in IRA retirement accounts are frequently tax-deferred or, in some cases, tax-exempt from federal and state income taxes. This can be a great help when you are in the process of Retirement Planning.

The less you risk, the more likely you will make less on your investment. Trust deed investments are a great way to get a consistent stream of passive income but not everybody takes this opportunity because they don’t understand how these investments work.

While investments do have risk, if you choose the right investments, that will make all the difference. A great aspect of trust deed investing is that there is low risk involved. Trust deed investing allows for the placing of money into real estate without requiring you to manage the property at all.

Here are the benefits of using your IRA to invest in trust deeds according to Accuplan:

  1. Secured By Tangible Property – Trust Deed investments are secured by a tangible property you can go and look at, “kick the foundation” and decide whether or not you would like to own if you have to foreclose.
  2. Safety – Low Risk As long as there is value in the property, your investment is secure. We never loan more that 65% of the value of the property, so you are assured that if it is necessary to foreclose, the property will be able to be sold to recoup the investment and make a profit.
  3. Great Returns – Depending on the type of deal, the borrower and the property, returns of 9-18% are typical. Past performance is no guarantee of future performance, and your returns may vary.
  4. Familiarity Many people are familiar with real estate investing because real estate ownership is so common. Stock transactions which produce the kinds of returns one can find in trust deeds often involve derivatives and complex financial instruments most people just don’t understand, or want to spend the time researching.

Real estate investment is an excellent way to build wealth and equity while also diversifying your portfolio. However, not every investor wants to go through the hassle of buying and managing investment properties. Luckily, traditional real estate investing is not the only route to take. You can invest in trust deeds with a self-directed IRA and trust deed investing is a widely used for of real estate investment that provides flexibility and security while you are in the process of Retirement Planning.

Hubert Bromma explains the benefits of using your IRA for real estate investments in How to Invest in Real Estate with your IRA and Pay Little or No Taxes:

“The widespread misconception that permissible IRA investments are limited to stocks, bonds, mutual funds and certificates of deposits is the result of people and companies who are in the business of selling these products. The Internal Revenue Service (IRS) requires that you have an approved custodian for your IRA or other retirement plan. For the vast majority of investors, the custodian is a bank, brokerage firm, or mutual-fund company—the very companies that are in the business of selling investment products. These custodians simply choose to limit your IRA investment choices to the products you sell. These limits are not imposed by the IRS.”

“The IRS rules allow you to invest your retirement funds in real estate, lend your IRA as a mortgage loan, and many other investment alternatives. The key is to have a custodian that is willing to allow you to self-direct your retirement plans, thereby expanding your investment choices and allowing you to freely choose how to direct your portfolio.”

When Retirement Planning with trust deed investments, the outright purchase of an investment property is not required. Some investors prefer to buy a portion of the deed. When trust deed investing in expensive markets such as California, this can be a great option. Trust deed investing is flexible which makes it feasible for borrowers who use hard money loans for their real estate investments. When working with a reliable lender who values communication and flexibility, trust deed investing is a great way to maximize your investment dollars.

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