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Advantages of a Self Directed IRA

ADVANTAGES of a - SELF-DIRECTED IRA $4 1. What is a Self-Directed IRA? The term "self-directed" means the individual account owner has complete control over selecting and directing their individual retirement account investments. An IRA is an Individual Retirement Account that allows individuals to put aside money for retirement. There are many tax benefits associated with these retirement accounts to encourage IRA saving. A self-directed account provides access to nontraditional assets, such as: Real Estate Precious Metals Commercial Energy, Gas & Foreign Currency Private LPs & Paper Oil LLPS 2. The History of Self-Directed IRAS Self-directed IRAS have been permitted since 1975 as part of the Employee Retirement Income Security Act of 1974 (ERISA). Pre 1974 1974 1975 1980's Today Initially, the investments of choice were most commonly real estate and notes. Since then, the self-directed portion of the retirement industry has become more recognized and accepted as a portfollo diversification strategy because investors can purchase At that time, a wide variety of assets. qualified plans, such as defined benefit, profit sharing, and money purchase pension plans, were considered self-directed IRAS. Many investors are venturing beyond stocks and bonds to other options that comply with the federal rules of permitted transactions. 3. What Types of Self-Directed IRA are out there? Many types of accounts (Traditional IRA, Roth IRA, SEP IRA, or SIMPLE IRA) can be a self directed. TRADITIONAL IRA ROTH IRA Contributions are tax-deductible. Investors pay Contributions are made with after-tax funds no taxes on IRA earnings until retirement, when and are not tax-deductible, but earnings and withdrawals are taxed as income. withdrawals are tax-free. SEP IRA S.I.M.P.L.E. IRA Allows an employer, typically a small business Savings Incentive Match Plan for Employees or self-employed individual, to make retirement allows employer and employee contributions, plan contributions into a traditional IRA similar to a 401(k) plan, but with simpler, less costly established in the employee's name. administration, and lower contribution limits. Several types of self-directed IRAS invest in specific assets. Here are a few examples: A Real Estate IRA holds A Gold IRA holds gold and An Offshore IRA invests real estate. other precious metals. in assets overseas. How does a Self-Directed IRA Work? F Currecy O Cewmed O Privade L RULE 1: RULE 2: Investors must choose their own Appoint a custodial firm that facilitates investment. the investment and keeps the books for a fee. $$$$ $$ $$$$ STOP RULE 3: RULE 4: Allocate some part of your savings to Do not get involved with or have any a self directed IRA. Experts recommend personal gain from an investment a maximum of 25% of an individual's before making withdrawals in retirement. retirement savings to be kept in This is seen as "self-dealing" which is a a self-directed IRA. major violation of tax code and exposes the account to penalties and taxes. • Real Estate • Foreign Currency • Precious Metals • Cash Deposits • Energy, Oil, Gas • Antiques • Private LPs/LLCS • Furniture • Stocks • Art • Bonds • Life Insurance RULE 5 Know which investment options are allowed and which are prohibited. 5. What are the Benefits of a Self-Directed IRA? WIDE RANGE OF ALTERNATE INVESTIMENTS Instead of being limited by a list of stocks, bonds, and CDs, a self directed account allows individuals access to: 00 Real Estate Precious Metals Energy, Gas & Private LPs & Foreign Currency Commercial Paper Oil LLPS USE YOUR OWN DISCRETION PROTECT YOUR WEALTH Invest in what you know and understand, Truly diversify your portfolio to protect instead of relying on others to manage against market volatility and harsh your investments. inflation rates. Take the Driver's Seat Crude Precious Ol Metals For example, if an investor is a Use commodities, whose demand is relatively real estate expert, they can leverage constant, to protect your wealth that knowledge by investing in property. against economic fluctuation. PARTNER WITH THE LOVED ONES TAX DEFERRED / TAX FREE GROWTH Partner with family members, friends, or Investments grow on a tax-deferred or colleagues on new investment opportunities. tax-free (Roth) basis. TREASURY VAULTE "Delivering currencies & commodities from our vault to yours" Sources: https://www.investorgov/employment-retirement/employment/self-directed-plans-individual-retirement- accounts-iras#.Uo9G3OZdXmY

Advantages of a Self Directed IRA

shared by eshagoyal24 on Jun 04
This infographic helps you understand the basics of a self-directed retirement account, the types available and the benefits to this kind of investing.


Esha Goyal


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