Self Directed IRAs Good Choice for Baby Boomers Seeking More Control and Diversification in Retirement Savings

Investors can own real estate and invest in businesses, hobbies or interests as part of SDRAs, reducing market risk and volatility

PORTLAND, Maine (November 30, 2010) – Self directed IRAs are a logical choice for the growing number of baby boomers who are fed up with market volatility and a lack of control over retirement savings, according to Laurie Bachelder, a financial advisor who specializes in helping U.S. investors take charge of their retirement nest eggs.

Self directed retirement accounts, or SDRAs, enable investors to legally invest all or part of their tax-deferred retirement portfolio in a wide range of non-traditional investments, such as real estate, businesses, even show horses, cemeteries or airspace rights, to name a few.

SDRAs are appealing in part because people saving for their retirement can make investments in what they know and understand, said Bachelder, a principal at NUA Advisors, LLC, (www.nuaadvisors.com) an Independent Registered Investment Advisory firm.

And that makes self directed IRAs ideally suited for the millions and millions of baby boomers at or near retirement age who desire more investment choices, she said.

“Many baby boomers have owned homes, started businesses, and intensely pursued hobbies and passions, which has given them a deep understanding, or core competency, in a number of areas,” Bachelder said. “With SDRAs, they can put their life experiences and wisdom to work for them as they pursue a comfortable retirement.”

The baby boom generation has experienced both the tremendous highs and the frightening lows on Wall Street over the past few decades and is looking for an alternative, she said.
“We’ve been on this wild roller coaster ride for so long now and I think there’s a sense out there that we don’t have any control over the future, that we have to go wherever the stock market takes us,” said Bachelder.

Investors have been led to believe that their retirement investment choices are limited to traditional stocks, bond or mutual funds, she said, and that diversification is achieved by shifting money between different asset classes within those areas.

The goal is to have a low correlation in your portfolio, she said. But that is proving almost impossible as recently the stock and bond markets have been behaving as if they are highly correlated, which means more risk and less diversification.

As a result, one of the best ways to truly diversify a retirement portfolio is to include non-traditional investments that are more resistant to stock market fluctuations.

Investing in markets that a retiree understands may also help them gauge the level of market volatility in that specific sector, giving them more control over the investment and reducing the risk of jeopardizing their retirement income in an unfamiliar market.

“Especially with the last market downturn, I’m finding more and more investors middle-aged and up who are fed up and want to gain more control over their future,” Bachelder said. “They are tired of having their retirement nest egg beholden to the whims of Wall Street. For them, creating a self directed retirement account is a huge step in the right direction.”

The concept of self directed IRAs is not a new one. Since the creation of the IRA in 1974, Americans have been able to invest their tax-deferred retirement accounts, which now include traditional IRA, Roth IRAs, Health Savings Accounts or Coverdell Education Savings Accounts, in almost any asset of their choosing.

Aside from a few investments, per the Internal Revenue Code (IRC), which exclude life insurance and collectibles to be held in a retirement account, the list of possibilities is virtually endless. If the IRC rules and regulations are adhered to, the imagination becomes the only limitation.

Yet, only a fraction of Americans are aware of this important option. A recent study showed that non-traditional investments make up less than 3 percent of the total IRA market.

“IRAs were originally intended for individuals to be able to invest in assets that make sense for the individual investor, but unfortunately, somewhere along the way that got lost,” said Bachelder, who is on a personal mission to educate baby boomers and others about the advantages of self-directed investing for retirement. Her firm, NUA Advisors, hold free workshops and seminars to educate the public, including investors as well as financial professionals, about SDRAs.

NUA’s goal is to bridge the gap between traditional and non-traditional investing, she said.

Wealth managers work with interested clients to identify, analyze and structure sound investments for SDRAs. While the non-traditional investment is in the SDRA, the firm monitors the investment and all income and expenses associated with it, and also develops an exit strategy.

“Our platform is not intended to replace traditional investments, which we still believe in, but to supplement them,” Bachelder said. “We introduce investors to strategies designed to provide true diversification that does not correlate with the traditional equity and bond markets.”

And for baby boomers in these uncertain times, the addition of a self directed IRA to their portfolio just might provide some much-welcomed peace of mind on their journey toward retirement.

NUA Advisors, LLC is an independent investment advisory firm that is bridging the gap between traditional and non-traditional investing. The firm, which was named a 2010 Five Star Wealth Manager by Crescendo Business Services, an independent research firm, is unique in that its team of experienced and knowledgeable professionals specializes in alternative investments within a Self Directed Retirement Account (SDRA). NUA advises clients on traditional securities investments such as stocks, bonds and mutual funds, as well as non-traditional investments. NUA serves clients in New England and throughout the nation from offices in Portland, Maine, Lexington, Mass., Columbus, Ohio and Long Beach, Calif. For more information contact NUA at info@nuaadvisors.com or visit NUA online at www.nuaadvisors.com.

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NUA Advisors Disclosures: There is risk associated with all investments, both traditional and alternative investments. Not all investments are for all investors, and appropriate portfolio planning, whether traditional or alternative is required prior to making any investments. Classification of risk for an investment is based on many factors, some of which is inherent in the investment and some of it is based on the portfolio and plan of the investor. Please seek professional advice prior to planning any investment whether traditional or alternative. Nothing in this article implies, either explicitly or implicitly, that NUA or the authors of this article is soliciting investors for any type of investment, nor is NUA or the authors providing any form of investment advice through this article. Not all information contained within this article may be applicable to all readers, and NUA shall not be held responsible or liable for any use of the information with or without seeking knowledgeable professional advice.

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