“rescue your 401K from your previous employer”

Next Generation Trust Services, LLC is a third-party administrator of self-directed retirement plans. The firm provides comprehensive account administration and transaction support services to account holders who direct their own retirement investments.

The professionals at Next Generation Trust Services offer education and guidance to individuals and their trusted advisers about the many nontraditional investments allowed within these plans, and ensure that account holders are investing safely and securely according to IRS guidelines.

MO: Why did you create Next Generation Trust Services and what in your background prepared you to create this company?

Jaime: I am a long-time real estate investor, real estate broker, and a certified property manager. I had heard about the possibility of investing in real estate through my IRA and of course I became quite interested in this. I looked for an advisor to help me make those transactions. I never did find that professional to help me but I did learn everything I could about self-direction as a retirement strategy and that was the impetus behind starting my company. We opened our office in 2004 and today we have $190 million in assets held.

I am also the CEO of a property management firm which was established in 1994, so I was prepared to run a company, since I’d been doing so for ten years already.

MO: Why is it important for people to consider the option of self-directed retirement plans?

Jaime: Many people might already be investing in certain vehicles outside of their retirement plan, and not realize they could be investing through a tax-advantaged IRA instead.

With self-direction, the investor makes all the investment decisions, choosing from many nontraditional investments such as real estate, precious metals, commercial paper, startup companies—it’s a long list of allowed investments. For certain savvy investors who are comfortable and already know about certain types of investments, doing so within a self-directed IRA allows that person to potentially build a more eclectic, aggressive retirement portfolio.

They don’t need to tie up their discretionary income; instead the investments are made within the self-directed IRA, with all the tax benefits of those accounts.

MO: On your website you state “rescue your 401K from your previous employer” Can you offer our readers some tips for doing this?

Jaime: Especially in today’s unstable economy, many people are leaving jobs where they had 401(k) plans, and are leaving the accounts behind. This out-of-sight, out-of-mind situation means individuals are giving up control of their investments and are leaving it to their employers to make investment choices for them. These choices are often not in the employees’ best interest and could carry high transaction fees.

However, people can roll over those assets from their existing 401(k) into a self-directed IRA that allows them to invest in a much broader array of instruments. They are not beholden to the employer’s plan and the requisite stocks, bonds or mutual funds most 401(k) plans are centered around. By rolling over the 401(k) assets into a self-directed account, the individual becomes the one who makes all the investment decisions.

MO: What would becoming a regulated trust company do for your business? What do you need to do in order to gain this regulation?

Jaime: By becoming a trust company, Next Generation Trust would expand its capabilities and serve our clients differently.

Right now we administer the self-directed retirement accounts and hold the assets; as a trust we would be the custodian of our clients’ assets. In essence, it would mean that we would be totally self-sufficient and not need a non-related outside entity to act as a custodian. This translates into more stability for our clients.

We are hoping to begin the trust charter process in 2012.

MO: You offer education and guidance for your clients. What is one resource that you frequently direct clients to?

Jaime: Our own website, www.NextGenerationTrust.com, offers visitors information about how self-directed retirement plans work, and explains all the various types of alternative investments allowed in those plans, so it’s the first place I direct people to for more in-depth information. The IRS website—www.irs.gov—also offers a wealth of information and we include pertinent information from it on our site as well.

MO: What is one piece of advice you can offer to our readers about where to invest their money?

Jaime: Make sure you are investing in what you know and understand, invest in what you are comfortable with. After all, with a self-directed IRA, you are the one making all the investment decisions. For example, if you are already investing in vacation or rental property, consider doing so through your self-directed IRA. Real estate is almost always a good investment over the long term.

Some people prefer more high-risk, short-term kinds of investments such as commodities; others have experience with venture capital. There are plenty of ways to continue these types of investments with self-direction.