Retirement is a difficult topic to talk about. It’s something that we all want to avoid, but it’s also something that we know is going to happen at some point in our lives. One of the best ways to ensure that your retirement goes as smoothly as possible is through investing in a Self-Directed Roth IRA. A Self-Directed Roth IRA gives you the ability to choose where your money is invested and how it grows through tax free savings accounts. However, there are plenty of other reasons why investing in a Self-Directed Roth IRA could be beneficial for you—and it helps to know them in advance. Here are just a few of them:
Is There an Age Limit for Self-Directed Roth IRA Contributions?
No, there’s no age limit for making Roth IRA contributions. Contributions to a Roth IRA are made with after-tax dollars, so you can make them at any point in your life. This gives you plenty of flexibility for making contributions even if you’re working later in life. The reason for this? Because you don’t owe money on the account after reaching retirement age—assuming everything has gone correctly—there’s no reason for the government to enforce Required Minimum Distributions on the account.
You Can Get Tax-Free Growth and Tax-Free Withdrawals
This is because you are investing in a Self-Directed Roth IRA, not a Traditional IRA. A Roth IRA uses after-tax contributions, so the tax is already paid on it before it grows. This is why if you invest money into a regular Roth IRA account and let it sit for 20 years until retirement age, you will get access to your money without paying any taxes for the distribution—the taxes are “front-loaded” because you made after-tax contributions. The money you invest in the account grows tax free.
You Can Choose How You Invest Your Retirement Funds
With a Self-Directed Roth IRA, you can invest in a wide range of assets, including real estate, private equity and other alternative investments. You can also invest in gold and silver through a Self-Directed IRA.
You Can Leave Funds in the Account as Long as You Live
You can leave funds in the account as long as you live. Unlike a Traditional IRA, which requires that you begin taking distributions when you reach age 73, there’s no such requirement for a Roth IRA. That means if your goal is to pass on your wealth directly to your heirs or beneficiaries upon death or simply keep it invested and growing over time, you can continue to do so using a Roth IRA. As mentioned earlier, there are no Required Minimum Distributions with a Roth IRA.
There are many more benefits to a Self-Directed Roth IRA. It’s important to understand the details of this investment vehicle before you make any decisions about your own retirement account.