Pension Laws Have Changed…Be Cognizant

Pension Protection Act of 2006 has been hailed as one of the most important pieces of retirement planning legislation in the past 30 years. The need for this kind of law was felt to address the ongoing funding issues facing many traditional defined benefit pension plans. This law covers a broad range of rules affecting retirement planning and covers employers sponsoring those plans, and plan participants.

Some features are:

* The contribution limits have been made permanent, this would make the next year’s increase to $5,000 for individuals under 50 and $6,000 for those over 50 secure.
* After 2008 the contribution limits will continue to adjust with inflation.
* Conversions to Roth accounts from pension plans, like 401k accounts, may now be made via a direct transfer to a Roth IRA, rather than having to go through a Traditional IRA.
* You can have your tax refund sent directly to your IRA.
* For 2007 you will be allowed to make a direct tax-free charitable donation from your IRA. This avoids taking the distribution as taxable income and then donating. Also, these donations do not count toward the maximum limit on donations allowed.

The new law restructures many of the rules affecting defined benefit pension plans, generally effective for the 2008 plan year. Some of the new stipulations are:

* The minimum funding rules for both single employer plans and multi employer (union) plans have been revised.
* The tax deduction limits for defined benefit pension plan sponsors are increased under certain conditions, and the computation of the combined limit on deductible contributions to the employer’s defined benefit and defined contribution plans is updated and, in general, increased.
* The rules for calculating lump sum distributions from defined benefit plans are amended. These rules are phased in over five years.
* The provisions affecting premiums required to be paid to the Pension Benefit Guaranty Corporation to cover certain benefits of defaulted defined benefit plans are altered, and include a special reduced variable rate premium for employers with 25 or fewer employees.

These changes have ensured that employees would retire if not wealthy, certainly with wherewithal to sustain their lifestyle. But if you want to retire wealthy, the one surefire way is to invest your IRA in real estate. Most people are not aware that you can take advantage of a rather unknown IRS code that allows IRA funds to be parked in real estate investments.

Real estate investments is the one avenue that has produced most millionaires. If you do your retirement planning prudently, with your IRA invested in real estate, you can retire not only comfortably but actually wealthy.
Now this piece of information sure must have perked the dormant real estate investor in you. Or at least it would excite your friendly neighborhood Realtor.

But it is not a piece of cake. As with everything connected to law, this code is vast and quite complex. Those of you who want to know more about making investment of IRA funds in real estate would do well to attend the IRA seminar on December 3, 2007 at South San Francisco, CA organized by Wealthy IRA where a powerhouse team of experts would dwell on…

* The “unknown IRS code” that allows IRA funds to be parked in real estate investment.
* How you can buy and sell real estate within your IRA, 100% Tax Free!
* The legal and tax ramifications of investing your IRA in Real Estate.