Investing and Your IRA

Notes for Your Retirement

Retirement accounts offer tax advantages, and they come in many flavors. Mortgage notes may be the right choice for your traditional IRA, Roth IRA, SEP, individual 401(k) or any other retirement account.

As you build wealth while you’re working, mortgage notes in a retirement account can deliver returns like most investors seek with stock market investments. The interest payments would go back into the account and grow tax-deferred. As cash builds up from the regular interest payments that mortgage notes deliver, you can put the extra cash to work in larger notes, or diversify by lending money to qualified borrowers with additional notes.

Retirees generally seek income, and mortgage notes yield more than most bonds. The Note Shop has an expert personally checking each investment to make sure it’s safe. We also work with you to help find the right notes to provide part of your retirement income.

The Note Shop believes that mortgage notes are part of a well-diversified portfolio. Many investors use simple formulas to split retirement accounts into stock and bond investments. Some subtract their age from 100 to determine the right equity allocation. Bonds seem safer than stocks, but really don’t offer as much diversification as you’d think, especially at those times when you need diversification. They both tend to decline sharply at the same time. Notes are safe and because they are short-term, less than 3 years, you get your investment back quickly with less risk than faced by investments in traditional bonds.

Notes are an allowable investment in retirement accounts under IRS rules. Whether you can use them in your account will depend upon your custodian. Some custodians will work us so we can deliver notes to your account and others will not accept mortgage notes as an investment. We know that Entrust, Equity Trust, and Pensco allow these investments.

Notes are always in your name, and you always retain control of your money. The Note Shop works for you, helping you invest your money smartly, but never taking control of your money. Retirement accounts are handled the same way, with the money staying in your control and in your personal account.

If your current retirement account custodian won’t allow you to grow wealth or generate income with mortgage note investments, consider working with your tax advisor to set up a new account at a custodian that does. It only takes a few minutes, and the professionals at The Note Shop will help as much as we can. But we aren’t experts in taxes and we’ll always advise you to consult your accountant or tax specialist to be sure you get the best option for your personal circumstances. Taxes are complex and ever-changing rules require constant attention. We prefer to specialize in what we do best, putting together safe deals with good rates of return instead of spending hours reading new tax laws.

We’re ready to help with your retirement. Contact us if you’d like to learn additional information on how to maintain complete control of your money while earning good returns with mortgage notes.