Optimizing Retirement Savings with a Self-Directed Roth IRA

How Much Do You Have Saved for Retirement?

It’s time to face facts: the Baby Boomer generation is getting older. Referring to the generation born in the post-war “baby boom” of 1946-1964, the Baby Boomers will all be 65 or older by the year 2030. That means that the pace of baby boomer Retirement is fast accelerating. And although many of these baby boomers might have a Self-Directed IRA or some form of Retirement, the simple fact is that not enough are prepared for what lies ahead.

Baby Boomers

In a recent article at MarketWatch, which highlighted a survey of 1,000 Americans, showed that despite the relative prosperity of the baby boomer era, few are saving well for Retirement. Said the article: “Respondents who are still working, with a median age of 60, have average savings of around $112,000.” And, even worse, “Less than half of those surveyed have saved $100,000: Not even close to enough to support a median income of around $40,000 a year in Retirement.”

In other words, many baby boomers are either approaching or at Retirement age—without a lot of savings to show for it. That may be why the survey found that 80% of respondents expected their standard of living to fall during Retirement. But should it really be this way? Why can’t investors build momentum going into Retirement, even if they’re at an advancing age that is closer to being retired than they might like?

Using a Self-Directed Roth IRA in Retirement Years

One way that baby boomers—and anyone thinking about the long term—can continue to save for Retirement is to use an after-tax investment account like a Roth IRA. A Self-Directed Roth IRA has no required minimum distributions (RMDs) later in life, which means investors can continue to use this type of account even when they’ve gotten past the official Retirement age of an IRA.

Another advantage of the Roth IRA is that this money can continue to compound and grow over time. And without having to take RMDs from the account after hitting the typical RMD age, many baby boomers could potentially use their highest-earning years to save a substantial amount of money in Retirement.

Why self-direction? The advantage of using a Self-Directed Roth IRA is it allows investors to use alternative asset classes within the account. For example, if someone wanted to hold a piece of real estate to generate rental income during Retirement years, this would be an ideal vehicle for doing so. But it goes beyond real estate—with the right Self-Directed IRA administration firm in your corner, you can also invest in tax liens, precious metals, private companies, private notes, and more.

Is It Possible to Start Saving for Retirement Later in Life?

Not only is it possible, but it may be necessary. With so few baby boomers having enough in Retirement to generate a full Retirement income, they may become reliant on family members, social security, and other benefits to make do in Retirement. This means living on a fixed income, which can be stressful—especially in a period that sees rising costs on nearly everything, including food and gasoline.

For millennials and anyone looking into Retirement investing, these survey results should be eye-opening. The time to save for isn’t in some distant future, when you can care about it later. It’s now. And for many people, that means getting proactive with a Self-Directed IRA that allows you to invest in a wide variety of assets.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at www.AmericanIRA.com.