by Jason K. Powers

To understand the unique approach of the Infinite Banking Concept (IBC), it’s essential to first delve into the foundational practices of the modern U.S. banking system – particularly, fractional reserve banking. This system, where banks are required to keep only a fraction of their total deposits in reserve and are free to lend out the remainder, is a cornerstone of contemporary finance. While the theory is that it fosters economic growth through increased lending (and most certainly enables banks to generate significant profits), it also introduces significant risks such as bank runs, asset bubbles and destabilization of the financial system at large, as we’ve seen time and time again.

Fractional reserve banking effectively creates money out of thin air. For every dollar deposited, only a fraction is kept on hand, and the rest can be used for loans. Before 1992, banks were required to keep 12% of deposited amounts on reserve. This meant they could loan out the remaining 88%. In 1992, that reserve was lowered to 10%.  This now meant that 90% could be loaned out. In March of 2020, following the shockwave of COVID-19, the Federal Reserve lowered that requirement to an unprecedented 0% (Zero Percent), where it has remained to date. We all know what this means.

This can lead to a multiplicative effect in money supply creation, potentially leading to inflation if not carefully managed. Through the lens of Austrian Economic theory, we would argue that it leads to unsustainable credit expansion that can cause economic bubbles and crashes. Austrian economists advocate for a banking system based on sound money principles – where money supply expansion is tightly controlled and closely tied to real assets like gold, thereby promoting economic stability and reducing inflation risks.

Transitioning to Infinite Banking Concept

Against the backdrop of these potential instabilities inherent in fractional reserve banking, R. Nelson Nash introduced the Infinite Banking Concept. Nash proposed that individuals could become their own bankers, thus sidestepping some of the systemic risks posed by traditional banking practices. By utilizing dividend-paying whole life insurance policies as financial tools, individuals can build a personal banking system. This system allows policyholders to borrow against the cash values of their policies rather than depending on commercial banks for loans.

Here’s how it works: a policyholder pays into a properly structured whole life insurance policy designed specifically for the purposes of Infinite Banking, which over time accumulates a cash value. This cash value grows at a guaranteed rate and also earns dividends. Policyholders can then borrow against this cash value for personal (or business) financing needs – whether for buying a car, investing in real estate, or funding a child’s education – without having to go through a traditional bank. Now you, the policy holder, is in control of the banking function in your life.  Imagine a life without the bank.

The beauty of this system lies in its simplicity and control. Loans taken against a life insurance policy come with no mandatory repayment schedule, and the interest rates are typically lower than those of bank loans. Moreover, since the policyholder is borrowing against their own savings, they are essentially paying themselves back, thus keeping the money within their personal economy.

Infinite Banking as a Sound Money Solution

From an Austrian Economic perspective, the Infinite Banking Concept resonates strongly with the theory’s core principles. Austrian Economics favors systems that minimize the risk of inflation and promote fiscal conservatism. By encouraging individuals to save and build their wealth within a life insurance policy – a historically stable and non-volatile asset – IBC promotes financial self-reliance and stability.

Moreover, by reducing reliance on traditional banks and their loan products, individuals using the Infinite Banking Concept mitigate the risk of being adversely affected by broader economic downturns or banking crises. They create a buffer against economic uncertainty by leveraging their life insurance policies to fund their borrowing needs.

In conclusion, while fractional reserve banking has facilitated economic expansion and prosperity on a massive scale, it is not without significant risks – risks that are amplified by the very nature of the banking practice as critiqued by Austrian Economics. The Infinite Banking Concept offers a compelling alternative that not only aligns with Austrian principles of sound money but also empowers individuals by making them their own financial managers. By building wealth in a controlled, self-sustained banking system, individuals can achieve greater financial security and independence, making the Infinite Banking Concept a prudent choice in an uncertain economic landscape.

Jason K Powers is a Multi-Business Owner, Real Estate Investor and an Authorized IBC Practitioner. In an exclusive partnership with the National Real Estate Investor Association, Jason is the go-to expert for all aspects of Infinite Banking and Life Insurance. Connect with Jason today to explore how life insurance can empower you to reach your financial goals. Visit www.1024wealth.com/NREIA for more information.

We’ve covered the disastrous effects of Rent Control for sometime now. This week various news outlets are reporting that President Joe Biden is proposing a 5% cap on rental increases, in effect implementing a de-facto rent control, nationwide.   According to the Rental Housing Journal, Biden’s plan will cap rent increases to 5% annually for landlords with more than 50 units but, they say, it will face stiff opposition in Congress.

In addition, The Washington Post says the measure would not only apply to landlords who own more than 50 units, which represents roughly half of all rental properties, but it wouldn’t cover units that have not yet been built.

The White House released a fact sheet on the proposal where they said “President Biden is taking action to make renting more affordable for millions of Americans.”

However, the WSJ summed up the proposal quite nicely in a lead editorial on July 17th:

“It’s hard to think of a worse idea than imposing rent control nationwide through the tax code. It would reduce investment in new supply and drive up rents in units not subject to government caps. Look at New York City where nearly half of units are “rent stabilized,” and the average one-bedroom apartment costs $4,300 a month.

As Mr. Biden’s re-election prospects grow more dire, his policy lurches to the left are becoming ever more radical.”

– The Wall Street Journal Editorial Board.

“The Biden Administration is exhibiting financial malfeasance by suggesting a distracting rent cap that would do nothing for rents, nothing for housing costs, and would only expand red-tape for governmental housing programs!”

“The housing supply has been strangled by red-tape and high interest rates.  Government-created problems will not be fixed by additional layers of bureaucracy.  In fact, as we have seen, economists have repeatedly stated that government control of housing prices destroys housing investment.  The U.S. housing market’s problems are widely varied and will require flexible, state-based housing responses.  National REIA members are ready to assist in private redevelopments and are critical to local success stories.  After all, we improve neighborhoods one home at a time.” 

– Said Charles Tassell, COO of National REIA.

Click here to read the full story at the Washington Post

Click here to read the full story at the Rental Housing Journal.

Click here to read the White House Fact sheet

Click here to read the WSJ editorial.

By Carl Fischer

Reaching retirement is an important milestone, and part of the journey often involves managing your retirement savings. If you’ve recently changed jobs or retired, you may be faced with the decision of what to do with your old 401(k) plan. It can be daunting or exhilarating. It can be similar to the past years or an opportunity to unlock your funds, take control, and invest in a different way. This article will explore various options available to individuals with old 401(k) plans and provide insights to help you make an informed decision.

1. Evaluate Your Current 401(k) Plan

Before making any decisions, it’s crucial to assess your existing 401(k) plan. Consider the plan’s investment options, fees, and overall performance. If you’re satisfied with the plan and it meets your retirement goals, leaving your funds in the current 401(k) may be a viable option. This decision allows you to maintain the tax advantages and convenience of managing your retirement savings in one place.

2. Roll Over to Your New Employer’s 401(k) Plan

If you’ve started a new job that offers a 401(k) plan, you may have the opportunity to roll over your old 401(k) funds into the new plan. Assess the new plan’s investment options, fees, employer contributions, and other features to determine if it aligns with your retirement objectives. Rolling over funds into a new 401(k) plan can simplify your retirement savings strategy and keep your investments consolidated.

3. Consider an Individual Retirement Account (IRA)

Rolling over your old 401(k) into an Individual Retirement Account (IRA) is a popular choice that offers greater flexibility and control over your investments. IRAs provide a wider range of investment options compared to most employer-sponsored plans. A self-directed IRA provides true diversity and control, and the most asset options available, including alternatives such as real estate, notes, private placements, and precious metals to name a few. Self-directing your investments is more work but you are using your expertise and knowledge and investing in what you know and understand.  You can choose between a traditional IRA or a Roth IRA based on your tax preferences. While a traditional IRA offers tax-deferred growth, a Roth IRA allows for tax-free withdrawals during retirement.

4. Weigh the Benefits of a Roth Conversion

If you’re considering rolling over your old 401(k) into a traditional IRA, it’s worth exploring the benefits of a Roth conversion. By converting your funds to a Roth IRA, you’ll pay taxes on the converted amount upfront, but future qualified withdrawals will be tax-free. This strategy can be advantageous if you anticipate being in a higher tax bracket during retirement or if you desire tax-free income in the future.

5. Evaluate Tax Implications and Penalties

When deciding what to do with your old 401(k) plan, it’s crucial to consider potential tax implications and penalties. If you withdraw funds from the 401(k) before reaching the age of 59½, you may incur early withdrawal penalties and be subject to income taxes. However, rolling over your funds into another qualified retirement account can help you avoid these penalties and maintain the tax-advantaged status of your savings.

6. Conclusion

Navigating the complexities of retirement planning and managing your old 401(k) plan can be challenging.  You should consider personalized guidance based on your specific circumstances and analyze the pros and cons of each option, considering factors such as your age, retirement goals, risk tolerance, and tax situation.

Deciding what to do with your old 401(k) plan is an important step in securing your financial future. Evaluating your options, including leaving your funds in the existing plan, rolling over to a new employer’s plan, or transferring to an IRA, requires careful consideration. Take into account your investment preferences, fees, tax implications, and long-term retirement goals when making your decision.

Members of National REIA can save up to $784, including a free consultation with the founder, one year of VIP customer service, and the opportunity to set up a new account for only $1. Plus, there are no annual fees until your first investment. You’ll also receive one free expedited transaction processing and two complimentary outgoing wires for your real estate deals.  Please visit www.iraasset.app/nationalreia for more info.

Carl Fischer is a founder and principal of CAMA Self-Directed IRA, LLC (dba CamaPlan).  CamaPlan is a national, self-directed tax advantaged plan administrator company headquartered in Ambler, PA.

By David Pickron

Maybe nowhere does the saying “time is money” apply greater than it does in our industry. For each of us, we are well aware of the expense of having a property sit empty for a month or more, painfully knowing the impact it has on our bottom line. Experience has taught me that in order to protect my investment, I have had to establish hard and fast timelines to ensure that my returns always stay on the positive side of the ledger. This starts right with my first interaction with a potential tenant, all the way through the move-out process.

Here is my counsel on laying out timelines for the first three critical pieces of the rental process:

Completing the Application-

I recommend setting a strict timeline for completing the application. My standard practice is to give the applicant 24 hours from showing the property to complete the application. This ensures that I still have the ability to show the property to other potential tenants without having to wait days or weeks for them to decide if they want the property.

Depositing Funds-

Once the application is approved and we have completed the on-boarding process, I require a non-refundable deposit within 24 hours to hold the property. Some landlords like to get the deposit before the application process, but I personally found that refunding that deposit if they are not approved is a hassle and if I can onboard quickly, I have the deposit soon enough with someone I know is qualified. Again, this is up to you to determine, but apply this to all your tenants.

Rental Payments and Moving into the Property-

Although you may see these as the same things, they are very different. This is especially true when it comes to source of funds. With the rise of government involvement in housing, specifically Section 8, they are trying to control the timelines surrounding your property. If you decide to rent to someone receiving government assistance, the process takes two months to complete. In this case, are you willing to give up two months’ rent as you wait and hope that the applicant and your property are approved? For me, I require you pay the first month’s rent and take possession within two weeks after the lease is signed.

This process may seem obvious to many seasoned landlords. But I have one question, should you put these timelines in your detailed criteria before someone applies? The answer is a resounding YES! With all the tenant complaints and fair housing that is coming against us landlords, sharing your required timelines in a criteria shows that you have a strict, written policy and that treating everyone the same is something you take seriously. Now as a landlord, I know things change, markets change, and if you need to change your timelines in a criteria, then simply document the change and date your criteria sheet. If today you require move-in in 2 weeks, nothing says you cannot change your criteria tomorrow to say 4 weeks if needed; just always, always, always document it.  If you need a sample detailed written criteria, please email us at info@rentperfect.com and we would be happy to get a copy to you.

David Pickron is President of Rent Perfect, a private investigator, and fellow landlord who manages all types of rentals. Subscribe to his weekly Rent Perfect Podcast (available on YouTube, Spotify, and Apple Podcasts) to stay up to date on the latest industry news and for expert tips on how to manage your properties.

Members of National REIA can take advantage of special pricing from RentPerfect; the solution for rental property owners and managers for screening & managing tenants.  Learn more by visiting www.rentperfect.com or calling 1-877-922-2547.

By M. Jane Garvey

In a society where instant gratification is the norm, it may be tough to think about long-term planning and the benefits of delayed gratification. But as investors that is precisely what we should be doing. Taking the time to consider the consequences will almost always benefit us in the long run.

Myopic behavior – or short-sightedness – often drives people to make impulsive decisions or to take unnecessary risks. To avoid such behavior, you must learn to consider the long-term implications of your actions.

One of the most common examples of myopic behavior is the housing provider deciding to rent to a marginally qualified renter. Vacancies are financially painful. So, to avoid the short-term pain of paying the bills without the income from rent, the housing provider makes the gamble to rent to someone that has a high probability of failure. The short-term benefit of no vacancy may lead to the longer-term cost and pain of an eviction and all the loss and damage that comes with it. Experienced housing providers will always tell you to wait for the well qualified applicant. The quick fix rarely is the right choice.

Buying an inferior part or tool because it is cheaper is another example of myopic behavior. If the plumbing part breaks, when will it have to be replaced? What is the cost to have it replaced, and even worse, what is the cost to repair the damage caused by the failure? These costs need to be considered in your decision. Cheaper is not always cheaper in the long run.

Ignoring small “leaks” in your cash flow is a big mistake. Let’s say you are spending $100 per month more than you could be on your insurance. If you made the needed change to the insurance and invested that newfound cash flow savings at 10% interest, over the course of the next 10 years you would have $20,484.50. If instead you invested it over 30 years you would have $226,048.79.  The myopic behavior of not finding the time to fix the “leak” can be very costly long term.

Survival in the real estate business involves avoiding unforced errors. Ignoring market conditions is one such error. Ignoring governmental imperatives is another. Violating the precautionary advice of long-term investors is yet another. You will need to think long term and be willing to adapt your strategies to survive long term.

We have seen investors who seemed to be very successfully rehabbing and reselling property while interest rates were low and buyers were competing for properties. In order to find deals to bring to market, some of these investors started making decisions that were only viable in ideal market conditions. They shrunk their profit margins, started counting on market appreciation, bought houses in undesirable locations, or with undesirable floor plans, cut corners on the rehabs to save money, and other similar things. These myopic behaviors eventually lead to trouble when the market shifts.

In some areas of the country the rental property business is under attack. Housing providers are being asked to take risks on potential residents who have a high risk of not being able to meet their obligations under the lease terms. Rents are being regulated via rent control and other measures. Taxes and regulatory expenses are increasing, shrinking profitability. There is myopic behavior in these instances by government as well as the investors that choose to continue their operations in these areas. Legislation that discourages investment may bring a short-term benefit to the current residents, but in the long run housing shortages will hurt everyone. Investors who choose to stay in an area where their business is under attack are like the ostrich with its head buried in the sand. Trouble is upon them, and they are either blissfully unaware, or think that if they can’t see it, it can’t see them. This myopic behavior can be disastrous.

In the excitement of learning about investing, cautionary advice from long-time investors can seem discouraging. Some newbies don’t want to hear it or see it – like the ostrich with its head in the sand. This advice can give you a long-term perspective and will dramatically increase your chances of long-term survival in this business. Navigating the waters of market shifts is best done with some guidance. Join your local investor association and spend some time getting to know the long-time investors. Their wisdom will help you make wiser decisions that do consider the long-term effects.

Learning about alternative strategies that can help you adapt to changes in the market is another thing that myopic thinkers ignore. The time to learn is before you need them. Making sure you have back-up plans for your investments is important. Real estate is not as liquid as many other investments, so we need to know how to adapt, and be able to shift our strategy when things aren’t working. Many office, mall, and other commercial properties have major vacancy issues right now. In some areas short term rentals are under legislative attack. The investors who have alternative use plans have a better chance of surviving these shifts.

Diversification is another important part of long-term survival. A variety of investments in a variety of property types in a variety of locations will lessen the risks. You should still take the time to regularly look at the continued viability of your holdings and the markets they are in. This approach will allow you to make the shifts needed when problems are on the horizon.

Think Long-Term, Act Long-Term, Survive Long-Term and Profit Long-Term

Jane Garvey is President of the Chicago Creative Investors Association.

The plaintiffs argued that New York City’s law constituted an unconstitutional taking by preventing owners from terminating a lease at the end of a fixed term, “except on grounds outside the owner’s control.”

In a comment accompanying the decision declining to hear the appeal, Justice Clarence Thomas wrote that the “constitutionality of regimes like New York City’s is an important and pressing question.” He added that “in an appropriate future case, we should grant certiorari to address this important question.”

But, Thomas said, to evaluate the challenges to the city’s rent regulations, the court would need to consider whether specific regulations “prevent petitioners from evicting actual tenants for particular reasons,” as well as a “clear understanding of how New York City regulations coordinate to completely bar landlords from evicting tenants.”

Click here to read the full report at Multihousing News.

By Jeffrey S. Watson

The Corporate Transparency Act (CTA) is here and now in full force and effect. In 2021, Congress passed this legislation that was signed into law by President Biden but did become official and enforceable until January 1, 2024. This is the most broad, overreaching, and invasive federal reporting statute in the history of our government that squarely and directly impacts every small business owner, entrepreneur and real estate investor you know.

If you are a real estate investor, agent, broker, operator, or anyone else who owns a business, here is what you need to know.

1. Which of your entities are considered “reporting entities” under the CTA?
2. Who are the beneficial owners of each entity?
3. What disclosure information is required?

Using that information, you are now required to timely file your disclosures with the Financial Crimes Enforcement Network (FCEN).

I realize that is a heavy load of information, so let me break this down for you into bite-sized bits of information. Let’s start by looking at what entities are considered to be “reporting” companies under the CTA. The types of entities that must report include C-corporations, Sub-S corporations, LLCs taxed as corporations or partnerships, and LLCs treated as disregarded or pass-through entities.

There is a minimum threshold for the entity of owning, possessing, or controlling $1,000 or more. This means if you have an entity, for example an LLC, that has only been filed with the Secretary of State but does not yet have a tax ID number and does not yet own or control anything, that entity is not considered to be a reporting company yet. When that entity does get a tax ID number and has control or ownership of $1,000 or more of assets, whether directly or indirectly, that entity will then need to report.

What must be reported? Any person who has either substantial control of or an ownership interest of 25% or more in an entity must be disclosed. “Ownership interest” as defined under the CTA is incredibly broad and covers all sorts of arrangements, including, but not limited to, equity, certificates, interest in joint ventures, convertible interest, and bearer shares. Any individual who owns or controls an ownership interest through various means such as trusts, beneficiaries, grantors, intermediaries, or blocker MUST be reported.

The CTA aims to ensure that reporting companies identify all individuals who have substantial control and those who own or control at least 25% of that entity. I know what some of you are thinking. “Well, Jeff, I’ll never own more than 24%, and I’ll stay under that 25% threshold.” That’s fine, as long as you don’t have any substantial control, which I’ll define in my next email. I think you’ll be disappointed to find that your 24% ownership strategy will not work.

What is meant by “substantial control”? Under the Corporate Transparency Act (CTA), the definition of substantial control is distinct from other federal statutes defining that term, such as securities laws. Under the CTA, an individual is deemed to exercise substantial control if any of the following are true:

• they serve as a senior officer or manager of the entity that must report beneficial ownership information to FinCEN,
• they have authority over senior officer appointments,
• they have authority over a majority of the board of directors, or
• they influence important decisions, including those related to business operations, asset transactions, equity issuance, borrowing money, entering into contracts, and governance documents.

In the CTA, there is a non-exhaustive list of examples wherein an individual may exercise substantial control, but the foregoing list should give you an idea as to how wide open and subject to interpretation the term “substantial control” is as it relates to business operations, asset transactions and equity issuance.

Some of you may have read my previous email thinking, “Well, Jeff, I’m going to make sure I never own more than 24% of an LLC or corporation, so I won’t have to be listed in any report.” OK, then how are you going to be able to have that entity do what you want it to do without having “substantial control”? For example, in a small LLC that buys, fixes, and resells houses, whoever makes the decisions on what houses to buy, how much to spend, how to do the rehab, what contractors to hire, where to borrow the money, and when to sell the property and for how much, would all have substantial control. I trust by now you are beginning to realize just how broad and invasive this legislation is.

I’m going to close by giving you an update to a presentation I did last month on the CTA on behalf of the Seller Finance Coalition. Between when I did that presentation and the end of 2023, the regulators at FinCEN changed and expanded the timeframe for a newly-formed 2024 company to report. They have 90 days. If a company formed in 2024 makes any changes to its ownership structure, such as adding or losing a member or someone different having substantial control, it is still a 30-day reporting window for that.

Before I get into explaining my experience using the FinCEN website to register one of my existing entities so I could get a feel for what is going on, I want to make sure you understand a recommendation I’m making that has no material benefit to me but should have a huge protection for you. If you do not already have in place good identity theft insurance, you need to get that right away because it’s more likely than ever that your identity will now be exposed. You need to make sure that identity theft insurance covers the family-owned businesses you may operate and control.

I understand that on page 21 of the 22-page bill, Congress set forth requirements regarding the cyber security for FinCEN’s website, and they are saying it has been given the highest non-classified cyber protection possible; but I also know that there is a history of even classified websites in our federal government being hacked by foreign operatives. That information will be stolen some way, somehow. I don’t know when or by whom or how, but I’m preparing for it now, and I recommend you do the same.

Now for my thoughts regarding my first attempt to use the FinCEN website. At the outset, let me say that I’m impressed by the fact that the site was up and working, but I was highly annoyed at the fact that it looks to be a complicated, multi-page process that seeks to collect far more information than was collected by the office of the Secretary of State when I established my LLCs.

What I and other practitioners I’ve talked with have yet to determine is whether certain information can be auto-populated or auto-saved if you get a FinCEN identification number or if you get an applicant identification number. I would hope, at a minimum, that the applicant ID number would apply across all the entities I have and will be forming in the future.

Given that in the latter part of December, the bureaucrats once again changed their positions on one of the regulations giving a new filer 90 days instead of 30 days in which to register an entity formed in 2024, it allows adequate time for us to figure out how this website functions and how to use it correctly before the deadline for getting things submitted for our newly-filed entities. It also gives each of us time to make sure we develop a list of all the entities we have that we believe are “reporting entities” and gather the necessary information such as drivers licenses or passports and current physical addresses for ourselves and any individual who owns the entities with us.

As of the time of this writing, I don’t know if there are any particulars that the website is requiring relative to the quality or size of the photo identification, such as your drivers license or passport. Remember, we are in the early days of this brand new, invasive, and broad legislation, so there will be a lot of learning to do going forward.

Your comments and brief questions are appreciated. I read every one and will do my best to briefly respond. If you like this article, please feel free to share it on social media or otherwise and encourage your friends to go to WatsonInvested.com to sign up so they can receive my emails.

UPDATE 3/5/24:  Federal Judge Rules Corporate Transparency Act Unconstitutional

UPDATE 3/18/24:  Is It Unconstitutional or Not?

Jeffery S. Watson is an attorney who has had an active trial and hearing practice for more than 25 years. As a contingent fee trial lawyer, he has a unique perspective on investing and wealth protection. He has tried over 20 civil jury trials and has handled thousands of contested hearings. Jeff has changed the law in Ohio four times via litigation.  His articles are also regularly featured the RE Journal.  Read more of his viewpoints at WatsonInvested.com.

By Carl Fischer

Retirement is often seen as a time to relax and enjoy the fruits of one’s labor. However, many retirees are surprised to discover that their tax burden doesn’t necessarily decrease in their golden years. Several factors can contribute to higher taxes in retirement, including changes in Required Minimum Distributions (RMDs), the widower tax, lump sum distributions, tax code modifications, Social Security, legacy planning considerations, and the impending tax changes set to sunset in 2026. Additionally, savvy retirement planning can harness the benefits of Roth IRAs and 401(k)s to mitigate these challenges.

1. Required Minimum Distribution (RMD) Changes

One significant factor impacting retirement taxes is the RMD, which applies to certain tax-advantaged retirement accounts like Traditional IRAs and 401(k)s. RMDs dictate that retirees must withdraw a minimum amount each year once they reach a certain age, typically starting at 72. These withdrawals are taxed as ordinary income. As life expectancies increase, RMDs can potentially push retirees into higher tax brackets, leading to increased tax liability in retirement.

2.  Widower Tax

The loss of a spouse can be emotionally devastating, but it can also have financial implications. Tax laws sometimes treat widows and widowers differently, potentially resulting in higher taxes. For example, the widower tax penalty occurs when a surviving spouse loses access to certain tax deductions and credits that were available when they filed jointly. This change in filing status can lead to a higher tax bill.

3.  Lump Sum Distributions

Some retirees may receive lump sum distributions from retirement plans or pensions. While these one-time payments can provide a significant financial boost, they can also result in a substantial tax liability if not properly managed. Lump sum distributions are typically taxed in the year they are received, potentially pushing retirees into a higher tax bracket.

4.  Tax Code Changes and the Sunset Clause

Tax laws are subject to change, and these changes can have a direct impact on retirees. Governments may decide to increase tax rates, reduce deductions, or modify credits, all of which can affect retiree’s; tax bills. It’s worth noting that some of the recent tax changes, such as those introduced by the Tax Cuts and Jobs Act of 2017, are set to sunset in 2026. This means that without further legislative action, tax rates could revert to previous levels, potentially significantly increasing the tax burden on retirees.

5.  Social Security

Many retirees rely on Social Security benefits as a significant source of income during retirement. However, depending on your overall income and filing status, a portion of your Social Security benefits may be subject to taxation. This means that even though you’ve paid into the system throughout your working years, you could still owe taxes on those benefits in retirement.

6.  Legacy Planning

Estate planning and legacy considerations also play a role in retirement taxation. Passing on assets to heirs can trigger estate taxes, depending on the size of the estate and current tax laws. Moreover, inheriting retirement accounts, like IRAs, can lead to income tax obligations for the beneficiaries. Careful estate planning is essential to minimize tax implications while ensuring a smooth transfer of assets.

7.  Harnessing Roth IRAs and 401(k)s

To mitigate the potential tax challenges in retirement, individuals can strategically utilize Roth IRAs and Roth 401(k)s. Contributions to these accounts are made with after-tax dollars, which means that withdrawals in retirement are generally tax-free. By diversifying retirement savings between traditional and Roth accounts, retirees can have more flexibility in managing their taxable income, potentially reducing their overall tax liability. Consider converting pretax dollars to Roth accounts overtime as RMDs are not required with Roth accounts increasing your control over taxes.

Conclusion

While retirement should be a time of relaxation and enjoyment, it’s crucial to recognize that taxes can remain a significant financial concern during this phase of life. Factors such as RMD changes, the widower tax, lump sum distributions, tax code modifications, Social Security, legacy planning, and the impending tax changes set to sunset in 2026 can all contribute to higher taxes in retirement. To navigate these challenges successfully, retirees should consider seeking advice from financial professionals and staying informed about tax laws and regulations that may affect their retirement plans. Additionally, leveraging Roth IRAs and 401(k)s can provide valuable tax benefits and enhance financial security in retirement.

Members of National REIA can save up to $784, including a free consultation with the founder, one year of VIP customer service, and the opportunity to set up a new account for only $1. Plus, there are no annual fees until your first investment. You’ll also receive one free expedited transaction processing and two complimentary outgoing wires for your real estate deals.  Visit https: www.iraasset.app/nationalreia for more info.

Carl Fischer is one of the founders and principals of CAMA Self-Directed IRA, LLC (dba CamaPlan).  CamaPlan is a national, self-directed tax advantaged plan administrator company headquartered in Ambler, PA.

By Jason K. Powers

For real estate investors, the balance of risk and reward is a daily consideration. While tangible assets like properties can seem like solid pillars in one’s investment portfolio, unforeseen circumstances can threaten the stability of even the most carefully laid plans. This is where “Instant Term Life Insurance” becomes an invaluable asset.

Why Instant Term Life Insurance is Critical for Real Estate Investors:

Real estate investing is inherently linked with long-term planning. Whether you’re a seasoned investor with a diverse portfolio or just starting to dip your toes into the property market, the importance of securing your investments cannot be overstated. Instant Term Life Insurance is designed to provide rapid coverage for real estate investors, ensuring that their fiscal responsibilities are met, and their legacies are protected, even in the event of an unexpected tragedy.

Features of Instant Term Life Insurance:

National REIA has partnered with Unbridled Wealth & Jason K Powers to bring member their new Instant Term Life Insurance! This product stands out with its quick and hassle-free application process. Here’s what real estate investors can expect:

• Speedy Enrollment: Say goodbye to lengthy applications and underwriting processes. Our instant policy is designed to get you covered swiftly so that you can focus on what you do best – investing.
• Flexible Terms: We understand that each investor’s needs are unique. That’s why we offer flexible coverage options that cater to different investment scales and horizons.
• Competitive Rates: Tailored specifically for real estate investors, our rates are competitive, providing you with the financial protection you need without undermining your investment returns.
• Nationwide Coverage: No matter where your investments are in the 50 States, our coverage travels with you, offering a nationwide safety net.

Benefits for Real Estate Investors:

• Asset Protection: Ensures that your investment properties are protected, avoiding forced sales or foreclosure in the event of your death, by having appropriate life insurance coverage for outstanding mortgage debts.
• Estate Planning: Provides funds to pay estate taxes or settle debts, keeping your real estate holdings intact for your heirs.
• Business Continuity: Offers the means to maintain business operations for your partners or successors, ensuring that your real estate ventures continue without financial interruption.
• Debt Coverage: Can be used to pay off outstanding mortgages or loans tied to real estate investments, shielding your portfolio from debt liabilities.
• Liquidity at Death: Delivers immediate cash to your estate, which can be crucial for handling maintenance costs, property taxes, or supporting ongoing development projects.
• Buy-Sell Agreements: In the event of a death of one partner, funds from the policy can be used to purchase the deceased partner’s share of investment properties, which is essential for real estate partnerships.
• Tax Benefits: The death benefit from a term life insurance policy is generally income tax-free, providing your beneficiaries with maximum financial benefits.
• Collateral for Loans: Some investors may use their life insurance policy as collateral for loans, which can be used to further invest in real estate opportunities.
• Flexible Investment Capital: The payout from a term life insurance can serve as a financial springboard for your beneficiaries to invest in new opportunities or expand existing holdings.
• Peace of Mind: Knowing that your investments and your loved ones are protected in case of any unforeseen events can give you the confidence to take on new ventures and grow your real estate portfolio.

Conclusion:

Our Instant Term Life Insurance isn’t just a policy; it’s a strategic tool for real estate investors across the United States. It’s about securing your hard work and ensuring your investments stand the test of time, no matter what life throws your way.  Real estate investors understand the value of protection and planning. With our Instant Term Life Insurance, you can make sure that your assets, and your legacy, are always in good hands.  To learn more about how our product can be tailored to suit your investment strategy, visit www.1024wealth.com/NREIA.

Jason K Powers is a Multi-Business Owner, Real Estate Investor and an Authorized IBC Practitioner. Jason works with clients across the country showing them how to achieve their financial goals by taking control of the banking function in their life and creating financial velocity that can last for generations.

By M. Jane Garvey

Attitude can make or break you. We all have times in our lives where it is tempting to doubt ourselves and our abilities. Many of us also fall into the trap of externalizing control. It may be tempting to think we are a victim when people do something, intentional or not, that harms us.  When others, or even circumstances, force a change to our routine our immediate reaction is sometimes to feel angry or put upon. No matter what is happening, you have the choice of your attitude. You have the ability to do better.

As Henry Ford said “Whether you think you can, or think you can’t – you’re right.”  This quote has stood the test of time. Attitude is of the utmost importance in doing our best. We need to believe in ourselves and our abilities and avoid the limitations created by self-doubt.

We can take this process of adjusting our attitude to another level when we examine our feelings about the difficult things we are facing or have faced in our lives. Looking for the benefits and the opportunities in everything will be eye-opening if you have never tried it. This process can take you to new heights.

When something you perceive as bad happens in your life, start looking for a different way to perceive it. A friend of mine suggests the question – What is right about this that I am not seeing?  I tend to ask myself what opportunities does this present?  These and other similar questions take your mind out of the victimhood mode and put you back in control. It is not about what happens, it is about what you make of it.

For instance, my internet provider was recently acquired by a new company. That new company is forcing its customers to change their emails from the old company email to their new brand.  My initial thoughts, what a huge waste of time. I also have concerns that there will be problems created if I am not totally thorough and successful in getting my email changed everywhere it is used as a “user id” or is the sole contact info someone has for me.

In looking at this situation, there is no doubt there is work to be done and lots of it. It is also on their timeline, not one of my choosing. It is annoying to not be in control. Where are the opportunities?  First, I acknowledge that I should have known better when I chose to use the internet providers’ email, rather than setting up my own brand. So, this is forcing a change, and I can do better. I set up my own URL with email service so that I can control this as I move forward.

The second opportunity this presents is that I will soon be free to change internet providers. I was captive while using their email. Their prices have gotten outrageous, and their service is sometimes lacking. I have not made a move because this didn’t seem to be the best use of my time. Now that it’s being forced, they will be losing a customer.  Unintended consequences for them, but I have found opportunities that are helping me approach this change with a better attitude. One other side benefit is the elimination of tons of spam emails that have crept into my life over the past 20 or so years since I last changed email addresses.

There are benefits to be found by going through times in your past where you still have feelings of being a victim, or any other negative emotions. If you can rework your thoughts to look for what was right about these times and the changes you were forced to make, there are still opportunities to be captured. The more you do this, the more you can free yourself from the control the people, events, or circumstances involved have over your ability to prosper.

In my life I have a treasure trove of these types of things. Each time I investigate them, I am rewarded with insight, opportunities, and growth. It always amazes me what I find out about myself. The more you do this, the easier it will be to pull yourself out of depression, fear, anger, and other emotions that come from feeling out of control.

Jane Garvey is President of the Chicago Creative Investors Association.