Does a Self-Directed Roth IRA Help the Most in Retirement Years?

We talk about a lot of different topics here at American IRA. You can find information about what you can invest in with a Self-Directed IRA. We talk about the different types of Self-Directed IRA accounts you can open. But we don’t always back up and tell you a more central reason you should sift through this information: why you should care. Why do Self-Directed IRAs matter, and how will they be integral to your life and retirement journey?

Self-Directed IRAs Let You Invest Protected Money with Contribution Limits

The simple reason to care about IRAs? They give you the ability to protect your money. An IRA is a place to park investments where you don’t have to pay additional tax on them until you take the money out of the account. Or, in the case of some Roth IRAs, ever. You simply put your money aside and let it grow while you think about other things in your life. Over the years, you’ll ideally keep contributing to that IRA—and build a nest egg of tax-protected money.

This is another way of saying that Self-Directed IRAs offer a unique opportunity for investors to take control of their retirement savings. But there’s another way you can gain control: investing in the assets you want to include.

Self-Directed IRAs Let You Choose Your Own Adventure

Unlike traditional IRAs, which typically limit investment options to stocks, bonds, and mutual funds, Self-Directed IRAs allow investors to choose from a wide range of alternative investments. This includes real estate, precious metals, private equity, and more. By diversifying your retirement portfolio with alternative assets, you can potentially reduce your risk. Or you can enhance your returns. Or you can simply indulge in an investing strategy that matches up with your individual experience.

Another way of thinking about it? Self-Directed IRAs provide investors with the flexibility to live retirement on their terms. With traditional IRAs, you’re often limited to the investment options offered by your custodian or brokerage firm. This can be frustrating if you have a specific investment strategy or niche market you want to explore. Self-Directed IRAs empower you to invest in what you know and understand. Do you like rental properties? Invest in those. Small businesses? Go ahead. Agricultural land? It’s a possibility.  By leveraging your expertise and passions, you can build a retirement portfolio that aligns with your goals and values.

Stretching Your Retirement Dollars

Self-Directed IRAs offer tax advantages that can help you maximize your retirement savings. You can squeeze more juice from the orange. Contributions to a Traditional Self-Directed IRA are typically tax-deductible, meaning you can lower your taxable income in the year you make the contribution. Additionally, earnings within the account can grow tax-deferred until you begin making withdrawals in retirement. For Self-Directed Roth IRAs, contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free. By taking advantage of these tax benefits, you can potentially grow your retirement savings more rapidly than with traditional accounts.

Self-Directed IRAs are a powerful tool for investors who want a great retirement. Why care about them? Because if you use them to their full potential, they can be life-changing. Whether you’re interested in diversifying your portfolio, pursuing alternative investments, or maximizing tax savings, a Self-Directed IRA may be right for you. Because odds are, you’ll find that they’re not only for you—they’re a perfect fit for your goals. To learn more about how Self-Directed IRAs can benefit your retirement strategy, give us a call at 866-7500-IRA (472).

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