Q: Why should I choose a self-directed retirement account?
The majority of IRA sponsors including banks, brokerage firms, and insurance companies limit your investment options to the financial products, which benefit them the most. The IRS allows a wide range of investment options in your retirement plan and American Pension Services, Inc.® self-directed accounts allow every type of investment for your maximum independent wealth accumulation.
Q: What can I buy with my Retirement Plan?
American Pension Services™ neither limits investment options nor gives investment advice. With few exceptions your self-directed account gives you unlimited investment options including:
- Real Estate
- Private Stock Offerings
- Limited Liability Companies
- Trust Deeds
- Tax Lien Certificates
- Commercial Paper
- Limited Partnerships
- Unsecured Loans
- Secured Loans
- Mortgage Notes
- US Treasury Gold & Silver Coins
- And more!
Q: What is the difference between an IRA and a Roth IRA?
- Owner must have earned income.
- Maximum annual contribution = $5,500 (2013 & 2014).
- Catch-up provision (50 & Older) = $1000 (total 2013 or 2014 contribution = $6,500).
- Contributions no longer accepted after age 70 ½.
- Earns tax-deferred income, and profit, from the sale of investments as long as the investments remain in the plan.
- Contributions may be tax-deductible or partially tax-deductible depending: 2013 IRA Deduction Information | 2014 IRA Deduction Information.
- After 70 ½ you must begin taking a minimum required distribution by April 1st of the following year.
- Retirement Distributions are taxed at your personal income tax rate.
ROTH IRA: a ROTH IRA has many characteristics of a Traditional IRA, some differences include…
- If AGI exceeds $183,000 a year, personal contributions cannot be made to a ROTH IRA.
- There are no age limits for contributions.
- Roth IRA earns tax-free income and profit from the sale of investments.
- Contributions to the ROTH IRA are taxed.- Roth IRA’s are not subject to a required minimum distribution age.
- Roth distributions are not taxed as long as they are taken after 59 ½ and the account has been established for 5 years or longer.
Q: How long has American Pension Services been in business?
American Pension Services was established in 1982, administering self-directed plans for over 30 years.
Q: How long does a typical transfer/rollover take?
Transfers/rollovers take an average of 3 to 6 weeks
Q: When will my transfer or rollover monies be available for investing?
5 Business days after American Pension Services receive the money.
Q: How long does it take to set up an IRA or 401(k) LLC?
An LLC can take anywhere from 2 to 6 weeks depending on your legal professionals.
Q: Can I invest my IRA money with a friend and/or family member's personal money?
Yes (requires knowledge of prohibited parties and transactions).
Q: How many IRAs can participate in one investment?
Q: Why should I choose American Pension Services?
American Pension Services was established in 1982, providing over 30 years of service to individuals who are actively involved in creating a great retirement for themselves and a legacy for their families.
Q: When I purchase an investment with my retirement money is there a time period in which the money needs to be paid back?
No, it just needs to be consistent with your documentation.
Q: Where can I learn how to use genuine self-direction?
Educational seminars sponsored by APS and our associates are an excellent resource for learning more about self-directed retirement plans. Visit our Seminars & Events page or call our offices, 801-571-0667, for more information. You may also visit American Pension Services Blog, blog.americanpension.com for articles and information on self-directed retirement plans.
Q: What is a non-recourse loan?
The owner of the IRA account does not personally guarantee payment, the only recourse a lender has is to take back the property that was purchased with the borrowed funds.
Q: Why do I need a non-recourse loan?
A non-recourse loan is the only type of loan an IRA can acquire.
Q: What are the steps for buying an investment in my retirement plan?
Fill out a Buy Direction Letter that applies to your purchase. Return to APS with the appropriate documentation. (Buy direction letters can be found on the main menu under Online Forms).
Q: What services are included with the fees I pay American Pension Services?
Tax Reporting, Payments & bills per investment, handling of investment paperwork and documentation. APS maintains your IRA in tax deferred or tax free status, so you may buy and sell whatever makes the most sense to you.
Q: What is the difference between a BUY and a DISTRIBUTION?
Distribution: is a taxable event where the asset or retirement dollars go to the IRA owner, this can be triggered or created by a prohibited transaction or by taking money or assets out of the retirement plan. Buy: Purchase an asset for a retirement account.
Q: When I send a check to APS, what information is necessary to ensure accuracy and timeliness?
- Payment Coupon
- Account Number
- Asset Name
- Appropriate Accounting Information (Interest, Principal, Sold, or Gain)
Q: What transactions need a Direction Letter?
Direction Letters are needed for all transactions including:
- All Purchases.
- Request to Sign Title / Legal Documents.
- Transfers / Rollovers / Distributions.
- Bill Pay Request / Taxes.
- Change of Address.
Most account management forms are available for download on our website under Online Forms.
Q: What format can I use to send you my Direction Letter?
A letter may be emailed, faxed, or mailed.
Q: How do I make sure the property taxes for investments in my retirement plan get paid by my RP?
APS needs documentation stating the following:
- A list of “Notice of Taxes Due” for each asset.
- Direction as to when the taxes should be paid, yearly / quarterly.
- Address of property.
- Tax ID #.
- Any other directions for payment.
Q: Can I use personal funds to maintain and manage my RP assets?
Assets are owned by the retirement plan not you, and have to be paid for by the retirement plan. If you pay with personal funds it is considered a Prohibited Transaction!
Q: Commonly misused words:
- Direction Letter: Tells administrator what to do.
- Transfer Letter (Trustee-to-Trustee Transfer): Transfers money in RP to a new Trustee or Administrator. No tax reporting.
- Distribution Letter: Tells administrator how much money you want to take out of your RP, reported / taxed. 1099 issued.
- Rollover: A tax-free transfer of funds / assets from one RP to another. Reported to IRS.
Q: What are the steps for purchasing property with my self-directed retirement plan?
- Find Property.
- Find a Title Company: They work up the Documents.
- Complete an APS Buy Direction Letter.
- Closing: all documents need to reflect American Pension Services, Inc. Administrator for IRA Owners name and Account number. All documents are signed by American Pension Services and returned to the title company with the appropriate funding.
Q: I have a retirement account at a different company (i.e. 401(k), IRA, Roth, SEP, etc.), and would like to move my money to a self-directed plan with American Pension Services. What now?
- We offer ONLINE & PDF applications. Click here to download your PDF application. Click here to begin your online application.
- Complete one Transfer Letter for each account you would like to transfer to American Pension Services (you will be prompted to complete a Transfer Letter in the application process).
- Send all documentation to American Pension Services- Once APS has submitted the Transfer Letter, contact your current custodian to confirm they will be able to process the transfer request. This may help prevent delays in processing.
- APS will notify you when your funds have arrived.
Disclaimer: While every effort has been made to present current and correct information, inadvertent errors may occur and the specific facts of each individual's situation may change the results and recommendations provided herein. Please consult with qualified professionals including legal, estate, and tax professionals to discuss this information in relation to your personal situation.
(Rev. Jan. 15, 2014)