Working After Retirement

Some retirees find fulfillment in continuing to work after retirement. And it might not be such a bad idea to consider working part time after you decide to retire. There are numerous benefits that can come from it.

If you aren’t comfortable with where your retirement savings are sitting, part-time work could be a good option for you. Hopefully you set up some type of retirement plan whether it be a self-directed IRA or 401(k), but if not, you could be in the same boat as a lot of households between the ages of 55 and 64 that only have $12,000 in retirement assets. Continuing to work could help increase your nest egg and make retirement a bit more comfortable.

Do you currently have a mortgage? Almost half of homeowners age 62 and older have a mortgage. If you have to withdraw from your retirement account to pay off your mortgage, you’ll have to pay more taxes on your retirement distributions. Finding part-time work to pay off the mortgage will reduce your cost of living during retirement.

Sometimes you can be lucky enough to find a part-time job with health care coverage, which can help cover your health care costs. Medicare kicks in at 65, but if you decide to retire before you reach that age, you’re on your own. Setting up a Health Savings Account is another way to help take care of health care costs.

For decades, your purpose in life was your career. It can be daunting leaving that behind and trying to find a new purpose. Working-part-time can help ease that transition while helping to fill your days and bank account. Along with giving you a purpose, continuing to work can help keep you in shape physically and mentally.

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Downsizing during Retirement

A lot of people go through a downsizing period when retiring. Downsizing can include your living space, family heirlooms and other items. Something to keep in mind when downsizing is to focus on how each of these things will serve you in the future and not the importance they had for you in the past.

Living space is a primary area for downsizing during retirement. A house with multiple bedrooms and levels is great for a growing family, but not so much for a couple or individual. That much space isn’t needed and stairs may no longer be a viable option. Downsizing to a smaller house, condo or retirement home can be a great idea.
Location also plays a factor. Living farther out of town can become a hassle especially if driving abilities become limited. Moving closer to the center of town also saves on gas, leaving more money available to spend on fun activities. Depending on your retirement budget, you could also consider moving to a new town, state or even country. This can cut down on costs depending on the location you choose. There are many areas that are considered great locations for retirees. They are often in warmer parts of the U.S., with lower costs of living and an abundance of activities.

We have a tendency to accumulate stuff throughout our years and are reluctant to let it go. Some of these things are family heirlooms and can be relinquished to family members now instead of waiting. If they just take up room, it might be time to hand them down so someone new can appreciate them. One way to do this is to let your children or relatives decide what they would like. Give them sticky notes and let them go through what you’re wanting to pass down.
Go through the random stuff you’ve accumulated. If it doesn’t serve a purpose in this new phase of your life it can probably be let go. Donate these items to charity or hold a yard sale to make a little extra cash.

The term downsizing can be daunting and cast a bad light. But with retirement it really means having time to sort through your life, mentally and physically, and deciding what will suit you during the next phase of your life.

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Prohibited IRA Transactions and Holdings

There are many choices when deciding how to invest your self-directed IRA. There are also rules that you need to be aware of before investing.  Violating the rules on transactions prohibited in your self-directed IRA can make your IRA account subject to risks and penalties. These transactions are prohibited because they are considered as providing immediate financial gain to you or other disqualified persons.

 A disqualified person includes the account holder, their spouse, descendants, investment advisors/managers and any corporation, partnership, trust, or estate in which the holder had a 50 percent or greater interest.

As a Self-Directed IRA holder, you may not:

  • Borrow money from or lend to the IRA
  • Sell, exchange or lease property to the IRA account or from the account to yourself
  • Use the IRA as a security for a loan
  • Transfer plan income or assets to disqualified persons
  • Lend account money to disqualified persons
  • Extend credit on their IRA to disqualified persons
  • Furnish goods, services, or facilities to disqualified persons
  • Allow fiduciaries to obtain or use the plan’s income or assets for their own interest

There are also prohibited holdings in a self-directed IRA. These include:

  • Collectibles
  • Metals other than gold, silver and palladium bullion
  • Gems
  • Stamps
  • Coins
  • Alcoholic beverages and other tangible personal property as defined by the Secretary of the Treasury

There is an exception to the coin holding. Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins and certain gold, silver, palladium, and platinum bullion.

In general, a self-directed IRA account is extremely flexible, however, it is important to stay within the guidelines as the penalties can be significant.  As one of the nation’s leading independent self-directed IRA and 401(k) administration companies, Mountain West IRA not only guides investors through the process of establishing a self-directed IRA account, but also ensures accounts are maintained to avoid prohibited transactions.

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What Type of Investor Are You?

Each generation faces differing events and challenges that impact their investment strategies. Which type of investor are you?

The Traditionalist Generation (1925-1945):

Defining events: The Great Depression, lunar landing, WW I & II, Korean War, Peace Corp, McCarthyism, JFK assassination, Martin Luther King Jr. assassination

Traditionalists are generally a financially conservative generation. In fact, 49% of Traditionalists have more conservative risk tolerances, while only 10% are more aggressive investors. Traditionalists experienced employment stability, pension plans, and assured social security, leading to over half of Traditionalists with assets in annuities, and 87% with savings, investments or insurance to provide additional retirement income.

The Baby Boomer Generation (1946-1964):

Defining events: Watergate, Vietnam, women’s liberation and feminism, Roe v Wade, Civil Rights Movement, selective service

Boomers balance the liberalism of their youth with conservatism from age and years of family demands. 41% of Boomers have more conservative risk tolerances while 16% are more aggressive. While Boomers hope to receive retirement assets from employer-sponsored plans these plans are disappearing, leaving many late to realize the necessity of investing. They are currently facing the unique position of allocating unexpected income (parents’ trusts, real estate and other assets) while aiding the financial needs of their children. This has lead them to look toward longer-term income-producing investments with low volatility.

Generation X (1965-1980):

Defining events: Challenger explosion, “Black Monday,” Cold War, fall of the Berlin Wall, end of apartheid in South Africa, sale of the first Macintosh computers, rise of the AIDs epidemic, the Internet

Generation X witnessed the rise of technology, making them more entrepreneurial, independent, and goal-oriented. 23% of Generation X exhibit more conservative risk tolerance, while 31% are more aggressive. They started careers as cutbacks began on pensions and healthcare benefits. Additionally, nearly 30% of people in their 30s and 40s (includes early Millennials), still possess outstanding school debts. After paying debts, Generation X places priority on saving for housing and children rather than retirement. They view themselves as permanently on the cusp of financial disaster, minimizing their investments.

Millennials (1981-2000):

Defining events: Desert Storm, Iraq War, 9/11, Oklahoma City Bombings, Global Financial Crisis and Great Recession, social media, schoolyard violence, environmental impact awareness, Googling, multiculturalism.

Millennials witnessed an economic collapse, often referred to as “the Second Great Depression.” This impacts their investment decisions. In fact, 59% of Millennial investors say avoiding risk is their top priority. Investors, however, are few. With 37% of 18 to 29 year olds unemployed, 44% of recent college graduates underemployed (part time or in jobs that require no degree), and the highest student loan debt in history, Millennials are slow to invest.  Those who are investing, however, ensure that their investments are aligned with their philanthropic interests. In fact, Millennials ranked “social responsibility” in their investments higher than any other generation.

Which of these categories describes your investment style? The beauty of a self-directed IRA is the flexibility to manage your own investments. This allows you to match your investment risk comfort with your investments based on your own knowledge of investment. Contact Mountain West IRA to learn more about self-directed IRAs.

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Roth IRA V.S. Traditional IRA

When making the choice to invest in an IRA, the decision can seem a bit daunting. You may be wondering what type of IRA would work best for your needs. Additionally, the terminology and volume of information may have become overwhelming.

Mountain West IRA offers multiple retirement savings options to our customers. It’s important to understand that SEP IRA and Simple IRAs as well as individual 401(k) plans all revolve around meeting business needs. If, however, you are attempting to meet your own retirement needs, regardless of your employer, the Roth IRA or Traditional IRA are two options available to you. Did you know that all of these different types of IRAs can be done in a self-directed IRA account?

To begin, let’s take a look at the similarities:

Maximum Contributions: The maximum contribution limit for both IRAs is $5,500 for 2014. The only exception is for those who are age 50 or older. These individuals may contribute an extra $1000 to their IRA as a catch up contribution.

Contribution Deadlines: Contributions to an IRA must be completed by April 15 to count for the prior year.

Here’s a comparison of the Roth IRA and the Traditional IRA:


Roth IRA

Traditional IRA

Tax Benefits:

Tax and penalty free growth, and qualified (conditions apply) withdrawals after 5 years


No tax breaks for contributions

Tax deferred growth


Tax deductions may apply in contribution years



Any age

Earned Income

Income restrictions apply

Under 70.5

Earned Income

No income restrictions


Contributions are withdrawn tax-free


Earnings are withdrawn tax-free after 5 years and only when meeting certain conditions

Withdrawals of pre-taxed contributions and all earnings are taxed when withdrawn


Non-qualified withdrawals are penalized with income tax and a 10% tax


Exceptions apply

Withdrawals prior to 59.5 years of age are subject to a 10% early withdrawal tax


Exceptions apply

Minimum Distributions:


starting at the age of 70.5

Other Benefits:

After the 5 year holding period, up to $10,000 can be withdrawn (tax and penalty free) to cover first-time homebuyer expenses

Contributions lower your adjusted gross income providing tax benefits


Up to $10,000 may be withdrawn (penalty fee but still taxed) to cover first-time homebuyer expenses


Although these guidelines provide some great information you’ll want to consult your tax professional for the plan that best suits your individual needs. Regardless of which IRA you select, Mountain West IRA would be happy to help you open your self-directed IRA account. With your self-directed IRA you’ll be able to take advantage of a host of different IRA investment options to assist you in your quest for a happy and comfortable retirement. Please contact Mountain West IRA today to discuss the possibilities.

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5 Must-Have Characteristics for Successful Real Estate Investing

real-estate-investmentOver time, real estate investments have afforded many people the powerful combination of appreciation and income.  The purchase of real estate through a self-directed IRA is a popular choice for this and other reasons. While there is no definitive list of characteristics that make someone successful at real estate investing, most successful real estate investors share a certain set of characteristics.

  1. Competence – it is crucial to understand the ins and outs of investing in real estate. Joining local associations, such as a real estate investment association, can be a great way to develop an understanding about real estate investing. Mountain West IRA provides our clients with continuing education and seminars to put their self-directed IRA to work for them by investing in real estate. Learning as much as you can about real estate will help you become a more competent investor.
  2. Make decisions grounded in logic – with every investment decision you make, your strategy must be based on facts and logic. You cannot let emotions sway your financial decisions. Work on developing solid financial goals based on your knowledge and understanding of the market and avoid being influenced by emotion in your real estate transactions.
  3. Understand the real estate market – while it is necessary to understand the principles and strategies of real estate investing, you must also understand your particular market. Certain concepts you’ve learned about may not apply to the real estate market you’re investing in, so completing your own research becomes essential.  Asking questions of successful real estate investors or joining a real estate investors association can provide valuable information. If you are using money from a self-directed IRA for your real estate investments, it is absolutely crucial to understand the applicable rules and regulations. Contact Mountain West IRA for help in setting up your self-directed IRA and to understand the prohibited transactions.
  4. Be consistent – when you first begin investing in real estate, you must develop an investment strategy. Begin developing good habits early. There will be regular steps to take on a daily, weekly or monthly basis – do them consistently. Consistency is one of the biggest hurdles to overcome, but if you do establish consistency, success will likely follow.
  5. Establish good character – Stick to your principles and treat business deals the way you would a relationship – treat the other person like you want to be treated. Shortcuts and hasty deals can backfire and a damaged character is more difficult to repair than the “fixer upper” investment property. In the world of real estate investing, opportunities abound.

With patience, logically grounded decisions, and professionals like Mountain West IRA to help you establish and manage your self-directed IRA, you will have a much more enjoyable real estate investment experience.

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