June 5, 2014 Page 3 Finance Seniors Discover the Little-Known Investment Strategy Your Advisor Isn’t Telling You (BPT) - Did you know self-directed IRAs allow Americans to invest in assets other than stocks and bonds, while enjoying the tax-free or taxdeferred status of their retirement account? Very few Americans realize that they have the option to self-direct their IRAs, or other retirement plans, into real estate and other alternative assets. Most investors believe that the only IRA investment options are bank CDs, the stock market or mutual funds - often because of inaccurate information from their current IRA custodian. The truth is, with government-sponsored retirement plans such as IRAs and 401(k) s, you have the option to invest in almost anything (including real estate), not just stocks, bonds and mutual funds. All the benefits those plans provide, including tax-deductions and tax-free profits, apply to whatever investment you choose, including real estate. The power of tax-deferred and tax-free profits in real estate “The most powerful force on Earth is compounding interest.” - Albert Einstein One of an IRA’s greatest features is that it allows Americans to enjoy the true power of tax-deferred compounding interest. Compound interest occurs when interest is earned on a principal sum along with any accumulated interest on that sum. In other words, you are earning interest not only on your original investment, but also on the interest earned from the original investment. Compound interest can occur with any investment you make, but the true power of compounding interest is obtained when you make an investment through a tax-deferred vehicle, such as an IRA. By taking advantage of an IRA’s taxdeferred status, you do not have to pay tax immediately on your earnings, for example on the sale of a property or collection of rent. Thus, you are able to enjoy the power of compounding on all of your profit, not just what is left after taxes. Now apply those benefits to real estate investing. Tax-deferred profits on your real estate transactions allows greater flexibility to make more investments, or to just sit back and watch your real estate investment grow in value, without worrying about taxes. Is this for real? Most investors don’t know this opportunity exists because most IRA custodians do not offer truly self-directed IRAs that allow Americans to invest in real estate and other non-traditional investments. Many traditional IRA custodians are unaware of the fact that an IRA can invest in alternative investments, such as real estate. Only a truly self-directed IRA custodian like Equity Trust will allow you to invest in all forms of real estate or any other IRA investments as allowed by the Internal Revenue Service. Is this legal? It is. Since 1974, Equity Trust and its affiliate companies have assisted clients in increasing their financial wealth by investing in a variety of opportunities from real estate and private placements, to stocks and bonds in self-directed IRAs and small business retirement plans. There are a few prohibited investments, according to IRS Publication 590, as it relates to self-directed IRAs. These investments include artwork, stamps, rugs, antiques and gems. Other investments, including stocks, bonds, mutual funds, real estate, mortgages and private placements, are perfectly acceptable as long as IRS rules governing retirement plans are followed. Getting started Investing a self-directed IRA in real estate is simple and very similar to the way you invest in real estate. In no time at all you can be investing in real estate and other alternative assets receiving tax-free or tax-deferred profits for the rest of your life. The main difference to keep in mind between self-directed investing and general investing is that you are a separate entity from your IRA. As such, everything related to your investment must be titled in the name of your IRA and cannot be in your name, personally. Examples of this would be the property deed, insurance and utilities. Additionally, all profits generated from the investment, as well as expenses related to the investment, must come from and return to the IRA, and cannot be co-mingled with your personal funds. Self-directed IRA custodians such as Equity Trust are passive, which means they cannot give investment advice. • Centenarians Reveal Their Secrets to a Long, Happy Life (BPT) - One hundred years ago, the average American’s life expectancy was between 50 and 60 years, and so the estimated 53,000 centenarians in the United States today have lived much longer than most of their contemporaries. Perhaps that is why a new survey shows that these 100-year-olds feel “blessed” (36 percent), “happy” (31 percent) and “surprised” (12 percent) to have lived so long. Not one reports feeling sad or burdened; only 3 percent say they feel lonely. For the past n i n e y e a r s , UnitedHealthcare has conducted a survey of 100 100-year-olds to gain insight into their lives. For its most recent 100@100 survey, the company also polled 65-year-old baby boomers to examine how the attitudes and lifestyles of people entering their retirement years compare to those who hit that same age 35 years ago. According to the study, one thing both groups agreed on is that they feel younger than their years. On average, the centenarians surveyed said they feel just 83 years old, while 65-year-old baby boomers said they feel 55 years old. “It’s encouraging that older Americans feel more youthful than the number of candles on their birthday cake might suggest,” said Rhonda Randall, D.O., chief medical officer of UnitedHealthcare Retiree Solutions. UnitedHealthcare serves more than a quarter of America’s centenarians through its Medicare plans. “By looking at how they are living their daily lives, we can glean important insights about the keys to staying healthy and feeling vibrant as we age.” The following are some of the secrets to healthy aging, as revealed by the 100@100 survey. Secret 1: Keep up with exercise Despite their age, centenarians stay active: more than half walk or hike and nearly a third do strength-training exercises. Some even run outdoors or play team sports every week (4 percent). Exercise is an important part of boomers’ lifestyle as well. Nearly 3 in 4 walk or hike each week, 37 percent do strength-training exercises and 13 percent run outdoors or play team sports. Secret 2: Get preventive care to stay healthy O l d e r A m e r i c a n s are taking the saying “an ounce of prevention equals a pound of cure” to heart by keeping up with preventive h e a l t h c a r e services to stay we l l . Ne a r ly 9 in 10 get an annual exam (87 percent of centenarians and 89 percent of baby boomers) with their primary care physician, and the majority also report getting eye exams regularly (71 percent of centenarians and 76 percent of baby boomers). Secret 3: Maintain a positive attitude Both centenarians and baby boomers say maintaining their physical health and a positive attitude are equally important to successful aging (66 percent and 81 percent, respectively). In fact, 82 percent of centenarians say laughing/having a sense of humor is important to healthy aging. Perhaps the most important lesson revealed in the 100@100 survey findings is that living a long, healthy life is about more than just genetics. Daily habits and lifestyle choices can make a difference not only in how long people live but also in how they feel as they age. For more information on how to stay healthy beyond 65, visit nihseniorhealth. gov. For complete 100@100 survey results, visit the news room on UHC.com. • They’re graduating. And they think they Know so much! Ah, the surprises they have in store! And to accompany them on that journey of learning called life, surprise them with a gift to always remind them of one thing they know for sure: how much you love them. Come see us!
Manhattan 06_05_14
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