At New Direction Trust Company, the focus, rather than selling or recommending investments, is to help clients learn about their options and guide them through the process of making it happen. Co-founder and CEO Bill Humphrey says, “Self direction is not for everyone. The self-directed investor must be willing to take responsibility for investment choices, although their outside advisers or associates can help. Since we don’t sell any investments, we don’t question your choices or steer your decisions.” New Direction Trust Company offers Roth and Traditional IRAs, SEP IRAs, and Solo 401(k) plans.
Bill warns clients and potential clients not to overlook Health Savings Accounts (HSAs) as vehicles for covering retirement expenses of the medical variety. Creative investors are discovering the investment potential of HSA funds and some clients feel that the tax shelter of an HSA can be better than those of other retirement plans. New Direction Trust Company is a proud self-directed HSA custodian because many employers are now offering plans in conjunction with HSA contributions.
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A self-directed HSA can purchase alternative investment options at the discretion of the account holder. Earnings may be completely tax free, provided distributions are applied toward qualified medical expenses. Furthermore, HSA contributions can be completely tax deferred. Thus, HSAs offer tax-free contributions and distributions as well. Account holders generally defer distributions from HSAs to retirement years while allowing the account to grow in the meantime.
HSAs may not feature the five- or six-figure balances of IRAs or 401(k)s, but small plan balances don’t necessarily limit the client to small investments. HSAs can make purchases with other investors or use debt leverage, just as IRAs can.
Since 2003, New Direction Trust Company has focused on client education. Give us a call at 877-742-1270 or send us a message through your client portal at portal.ndtco.com if you ever have questions or concerns about HSAs or self-directed investing.