Using Tax Lien Certificates to Fund Your Retirement

As you know the biggest banks and institutional investors buy tax lien certificates because they’re:

•    Safe—they’re sold by state, county and local governments who administer the program.
•    Secure—the underlying security of the tax lien certificate is real property.  The tax lien investor has first position above nearly all others with a claim on the property.
Profitable—the returns on tax lien certificates are incredible compared to riskier stock, bond and mutual fund investments.
Did you know that tax lien certificates can help fund your retirement?

Tax lien certificates are approved by the IRS for inclusion in Self Directed Individual Retirement Accounts (SDIRAs).

WARNING:  Consult with your tax and financial planning advisors for all the details, risks and procedures required for setting up and investing in a Self Directed Individual Retirement Account.

Some things to consider having tax lien certificates in a SDIRA:

1.    Deferred taxes—as long as you keep the proceeds in the SDIRA you defer the tax until you have to take distributions.  You can continually roll over tax lien certificates and shelter the gains for years.

2.    Double your money faster—the tax deferment of an SDIRA account leaves a larger amount untaxed.  That means your money can double faster because you pay no tax on the gain until you have to take distributions.

3.    Buy tax lien certificates when you want—SDIRAs give their owners the right to carry the checkbook to make qualified investments when the opportunity comes up.  That means you can bring your SDIRA checkbook to the tax lien auction.

Remember, SDIRAs and tax lien certificates are not for everyone.  Due your due diligence, learn the rules and get professional advice before making any investment decisions.

Talk to you again next week.