Self Directed Roth IRA LLCThe Self-Directed Roth IRA - The Power of Tax-Free Investing

The primary advantage of using a Self-Directed Roth IRA LLC to make investments is that all income and gains associated with the Roth IRA investment grow tax-free and will not be subject to tax upon withdrawal or distribution. This is because unlike traditional IRAs, you are generally not subject to any tax upon taking Roth IRA distributions once you reach the age of 59 1/2. In general, the longer the time period, the more advantageous the Roth IRA is because of the powerful advantages of compounding.

One of the most important determinants impacting how large your retirement can get is the length of time you let your savings grow. The reason for this is that the effects of compounding can become a very powerful tool. Unlike a Traditional IRA, income and gains generated from a Self-Directed Roth IRA grow tax-free. In contrast, income and gains generated by a traditional Self-Directed IRA are only deferred, as taxes must be paid upon distribution, which are vulnerable to future increases in tax rates. The power of tax-free compounding can best be viewed by way of example: Assume Joe, who is thirty years old, decided to start a Self-Directed Roth IRA. Joe had a current Roth IRA balance of zero at that time. Assume Joe decided to make annual Roth IRA contributions of just $3500 each year until he reached the retirement age of 70. Further assume that Joe was able to generate an average annualized rate of return of 9% and the prevailing tax rate was 25%. At age $70 with a Roth IRA, Joe would have $1,289.022 tax-free in his Self-Directed Roth IRA. In contrast, if invested outside of a retirement account, assuming a 25% tax rate, the individual would have just $699,475. Hence, the Self-Directed Roth IRA allowed the individual to accumulate an additional $589,547 of wealth.

Americans love to spend and hate to save. Americans have one of the lowest savings rates for developed countries. Americans are the ultimate consumers and that definitely plays a role. Most people don't understand the basic concepts of retirement planning and how crucial it is, largely because they're not widely taught in our high schools or even our colleges and universities. For example, if young workers were shown that if they began funding a self-directed Roth IRA with $3,000 per year at age 20 and continue on through age 65, they will wind up with $2.5 million at retirement (assuming they earn the long-run annual compound growth rate in stocks, which was 9.88 percent from 1926 to 2011). Not a bad result for investing only $3,000 a year.

Calculate Your Self-Directed Roth IRA LLC Plan Contributions Please click here to see for yourself how little it requires to become a millionaire upon retirement by using a Self-Directed Roth IRA:

Saving just $10 a day can make you a millionaire when you retire.

Start saving with a Self-Directed Roth IRA and you will be rolling in money when you retire.

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