Why Should I Get a Self Directed IRA?

At a certain point, an employee must consider saving up for retirement. Planning for retirement is an important step for workers of all kinds. Who knows what the future might hold? It is best to plan accordingly and secure your future finances.

When it comes to retirement plans, you may want to consider a self directed plan. Hundreds of self direct IRA companies are at your disposal. They can help you figure out what plan works best for you and answer any question you might have about IRAs.

Why Choose a Self Directed IRA?

Quite simply, with a self directed IRA, you are the one who makes all the decisions about where and how you would like to invest your money.

Although IRS regulations stipulate that a qualified trustee or custodian holds all assets for the owner, you obtain sole responsibility over the investments you make, whether it’s bonds, private stock offerings, or, most commonly, property.

Self directed IRA services are available to help you establish retirement accounts and manage your funds.

Furthermore, there are several different types of self directed IRA plans available, allowing you to choose the plan most suitable for you.

Types of Self Directed IRAs

A few common self directed IRA plans include:

• 401(k) – A self directed 401k is a defined contribution benefit plan, allowing you to save for retirement and invest savings while deferring income taxes on all saved money prior to withdrawal. A portion of your wages is paid directly (deferred) to your savings account.

The 401k is generally the most popular employer-sponsored retirement plan. Your employer can choose to match part or all of your contributions by depositing additional funds into your account or by offering a profit-sharing plan contribution. Many employers also offer the option to purchase stock in the company.

• Traditional IRA – As the most common type of self directed IRA, this retirement plan is tax-deferred, allowing funds to grow faster than other taxable accounts. Taxes are only paid after withdrawals have been made, and contributions made to your account are deductible. The taxpayer receives benefits immediately.

• Roth IRA – This retirement plan has no upfront taxes, allowing funds to grow tax-free. Withdrawals that are made after retirement are free of taxes, and unlike most savings plans, a Roth IRA does not have any age requirements for its distributions.

However, contributions are not tax deductible, and eligibility narrows after certain income limits.