Advantage of Self-Directed IRA Investing Within the Changing Scope of Social Security

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With the onset of 2017, there are some positive and negative certainties and speculations for Social Security benefits. According to, one of the positive certainties for 2017 is that Social Security benefits will increase under the cost-of-living adjustment (COLA). However, the COLA for 2017 is only 0.3 percent, which will likely not make much of an impact on most retirees’ benefit checks.

The earnings-test threshold also changes in 2017. This threshold determines how much a retiree’s benefits are cut if they work past retirement age. For 2017, the threshold rises to $16,920 from $15,720 in 2016.

Americans earning more than $118,500 will pay additional taxes for Social Security in 2017. In 2017, the wage base increases to $127,200 from $18,800 in 2016. Retirees who earn at least $127,200 will see taxes go up by $539.

Speculatively, Brannon T. Lambert, retirement expert at Canvasback Wealth Management, suggests that the new Republican cabinet’s changes to Social Security could include proposals Republicans have made over the past decade to curtail the dwindling funding for social security. These proposals could include increasing the retirement age, limiting benefits to wealthier Americans via means testing, and changing the way benefits are calculated.

The mutable nature of social security may encourage retirement investors to try and secure funding for their future through alternate routes. Diversity in a retirement portfolio can help offset whatever decrease retirees may be facing with social security moving forward.

Cash-producing assets in a self-directed IRA may become even more valuable as social security faces a potential decline in benefits. With a self-directed IRA, retirees can invest in rental real estate, dividend-producing private equity, and even originate loans. Keep in mind that in the lending scenario, if a self-directed IRA investor is distributing cash from the borrower’s payments, they would need to decide if they want to distribute the principal or keep loaning the cash out.

Alternative assets also free up investments from the stock market, which is another historically volatile industry. Self-directed IRA investors can use specific market expertise in areas such as precious metals, private lending, private equity, raw land, real estate, and more.

Learn more about the ways self-directed IRAs can help build a secure future financial future for your retirement. Feel free to contact New Direction IRA today with any questions or concerns.


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