Having a self directed IRA is important for independent business owners, because a self directed IRA provides financial stability. Some self-employed people have no idea they can still enjoy the benefits a self directed Roth IRA has to offer.
A self directed Roth IRA allows a person to use retirement funds to invest in real estate, businesses, precious metals, oil, and other commodities. Self directed IRA real estate investments can help any retirement account to explode with profits. Real estate makes a great investment for a solo 401K, because individuals can live within real estate while it accumulates value. In addition, real estate foreclosures are usually very affordable and can be a profitable way to start off any solo 401K retirement account.
A Roth IRA has other benefits that make it more flexible than a traditional retirement plan. All of the contributions made to a Roth IRA are nontaxable. Even investment returns are tax-free in a Roth IRA plan. This means that a person has an unlimited space to grow his or her investments without worrying about taxes. One other benefit of a Roth IRA program is that a person can contribute to one for as long as he or she wants. The only requirement is that a person continues to have earned income while contributing to the Roth IRA. A traditional IRA only allows a person to continue making contributions until the age of 70 1/2.
While a person may make contributions to a Roth IRA throughout his or her entire life, there are some minor restrictions on the maximum amount a person can contribute in a year. The maximum amount a person can contribute to a Roth IRA plan in a year is $49,000. If a self-employed person has a spouse who is also involved in the business, then the couple may contribute a maximum of $54,500.
Under a Roth IRA, changes also can be made frequently to the investments in the account. This allows for great diversification in a Roth IRA account.
Self-employed individuals also enjoy the freedom a Roth IRA retirement plan presents. With a Roth IRA retirement plan, one can remove his or her income from the account at any time. There is also no penalty for taking funds out of a Roth IRA retirement plan.
Having a Roth IRA is important for securing one’s financial life as an individual business owner. Creating a Roth IRA is one of the most important steps a person can take in the right direction.