Self Directed Roth IRA LLCWhat are the Advantages of Converting a Traditional IRA to a Self-Directed Roth IRA LLC?


The main advantage of a Roth IRA over a Traditional IRA is that if you qualify to make contributions, all distributions from the IRA are tax-free. Furthermore, unlike traditional IRAs, you may contribute to a Roth IRA for as long as you continue to have earned income (for a traditional IRA - you can't make any contributions after you reach age 70 1/2).

Self-Directed Traditional IRA

 

Self-Directed Roth IRA

Tax deductible contributions

Contributions are not tax deductible – contributions made to a Roth IRA are from after tax dollars

Distributions may be taken by age 59 1/2 and are mandatory by 70 1/2.

No Mandatory Distribution Age – with a Roth IRA you are not required to ever take distributions

Taxes are paid on amount of distributions (10% excise tax may apply if withdrawn prior to age 591/2)

No taxes on distributions if rules and regulations are followed

Available to everyone; no income restrictions

  • Single filers, Head of Household or Married Filing Separately (and you did not live with your spouse during the year) with modified adjusted gross income up to $105,000 can make a full contribution.  Contributions are phased-out starting at $105,000 and you cannot make a contribution if your adjusted gross income is in excess of $120,000.
  • Joint filers with modified adjusted gross income up to $166,000 ($167,000 in 2011) can make a full contribution.  Once again, this contribution is phased-out starting at $166,000 ($167,000 in 2011) and you cannot make a contribution if your adjusted gross income is in excess of $176,000 or $177,000 in 2011.

Funds can be used to purchase a variety of investments (stocks, real estate, precious metals, notes, etc.)

Funds can be used to purchase a variety of investments (stocks, real estate, precious metals, notes, etc.)

IRA investments grow tax-free until distribution (tax deferral)

All earnings and principal are 100% tax free if rules and regulations are followed – No tax on distributions so maximum tax-deferral

Income/gains from IRA investments are tax-free

Income/gains from IRA investments are tax-free

Purchasing a real estate property and taking possession of the property after 59 1/2 would be subject to tax

Purchasing a domestic or foreign real estate property then taking possession after 59 1/2 would be tax-free


To learn more about the advantages of converting a Traditional IRA to a Self-Directed Roth IRA LLC please contact one of our IRA experts at 800-472-0646.


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