Self Directed Roth IRA – Investing Retirement Funds Tax Free
June 9th, 2011
With a self directed IRA LLC, the individual has the ability to control how the IRA funds will be invested. When setting up a Roth IRA, the IRS code requires a written agreement that contains mandatory provisions. Your custodial firm will normally complete the necessary agreement and provisions of the process. With an IRA, you can contribute up to a certain dollar amount, or the contribution can come by rollover from an approved plan.
With a self directed Roth IRA, the account owner will be making all investment decisions, requiring due diligence of the owner. Although self directed IRA’s are more complicated, it is perfect for the individual who has a preference for, and experience with, certain types of investment vehicles. Self directing the funds empowers account holders to exercise maximum control and creativity with their investments. When a market trend or opportunity begins to form, they can take maximum advantage of it. This is great for those with knowledge, or for those who are willing to educate themselves. This allows their retirement funds to grow significantly faster than the typically small returns of managed programs.
Custodians of most self directed Roth IRA plans allow account owners access to all IRS approved investment vehicles. That includes all the typical investments from stocks, to real estate, to franchises, gold, and other popular options. However, there are two types of investments that don’t qualify for Self Directed IRA investing, namely, life insurance and collectible items.
Surely, the custodian of choice will be the one who believes you should keep as much of your self-directed Roth IRA as possible. Since you direct your IRA funds yourself, assuming the responsibility for asset growth, and since the funds are safely in a self directed IRA LLC bank account, the only thing you are required by the custodian is to pay an annual flat fee. The extra growth in funds that accumulates over the years and the savings from paying a small yearly fee, allows you to keep more of your earnings over the lifetime of your IRA account, and can add up to a really impressive amount. Both Solo 401K’s and Self Directed IRA’s provide great solutions for your financial future.
At this point it is easy to see that with a self directed IRA, your investment options are virtually unlimited. Being able to invest your IRA funds in the investment vehicle of your choice is truly empowering. You can create a diversified portfolio, wisely not putting all of one’s eggs in one basket.