January 2009

If you have not made your 2010 contribution, you still have time to act. Remember that the deadline for making your 2009 contribution is Wednesday, April 15, 2010. By making your contributions as early as possible, you maximize your tax-free/deferred return.

Not only that, but you no longer have to worry about it through the rest of the year with the potential of actually forgetting, come tax time. More money in the long term, with no stress for the rest of the year. Remember, the sooner you invest the tax-free/deferred money, the less time the IRS and federal government has to use your money, interest free.

Distributions
As you plan for the rest of 2010 and 2011, if you are or will be 70.5 before the end of the year and you have a traditional IRA or SEP account, you will need to decide on your required minimum distribution amount. Enclosed with your statement will be a worksheet and form for requesting that distribution.

Review these documents and decide if the minimum amount is adequate or if you want to take a larger amount. Then determine if you want to take the distribution in a one-time lump sum, or periodically (monthly, quarterly or semi-annually) over the whole year.

You should also consider the fee for taking a distribution (the fewer distributions taken, the lower the amount of fees that will be charged) versus leaving your funds in the account as long as possible (taking the distributions periodically or only as needed).

Also, consider the amount of tax (Federal or state) you would like to withhold. You may elect to not have any taxes withheld. These options are available to you and it is best to base your decision on what it is you want to accomplish.

Managing My Self-Directed IRA
Because your IRA is such an important tool in your retirement planning, you need to keep a watch on the account, the assets held and the investment returns. As a Self-Directed account, the assets selected for investment, their performance and any other aspect of the account are your responsibility.

As you receive statements, notices, and other communications from your IRA holding company, you should carefully review the investments you selected are actually performing as you originally expected. You should review the account at least once a year. You should review the returns on the account, in both current income and long-term growth. Are the returns living up to your expectations?

If not, should you consider re-allocating your funds? Remember that a retirement account may have many years to grow and a small change early in the life of the account to a higher performing asset could mean huge changes in the ultimate value of the account at retirement.

If you have questions about specific assets, their performance or their long-term output work with your financial advisor, CPA or attorney to make sure that the assets you have in your account are providing you with the greatest possible return.

Finally, at least once a year, review the basics of the account, your contact information, beneficiaries, etc to ensure that they are all up to date. With these basic skills and 401(k) and Self-Directed IRA review tactics, you will receive the best long-term returns on your investments as well as secure yourself a wealthy retirement!