There are many choices when it comes to saving for retirement. Many people are looking for alternatives to the standard IRA or Roth IRA that invests primarily in stocks, mutual funds and bonds. There are a variety of choices when selecting a retirement plan type such as a solo 401k. There are also several types of Self-Directed IRA plans such as the Self-Directed IRA Real Estate, Self-Directed Roth IRA, and the Self-Directed IRA LLC. All of these plan types offer some great ways to save for retirement tax free.
The Solo 401k plan is a like a traditional 401k plan. However, instead of covering many employees in a large corporation, it covers only one employee. It is best suited for independent contractors and those running sole proprietorships. The maximum contribution per year is $49,000. Investment options include stocks, mutual funds, bonds, real estate and precious metals. Investments grow tax deferred or tax free just like they do with a standard 401k plan.
The Self-Directed IRA in its various forms has been around for about thirty five years now. A limited liability company is established. The LLC is managed by the IRA account holder and the LLC is actually owned by the IRA account. The great thing about this type of IRA account is that one is not forced to invest in the stock market. One can invest in Real Estate as well as many other types of investments that cannot be made with traditional IRA plan. Investments grow tax free just like traditional IRA plans.
The Self-Directed Roth IRA LLC has some unique advantages. All investments are made with after-tax earnings, but all earnings grow tax free and are not subject to taxation upon withdrawal. At age 59½, one can take distributions from the account without paying taxes. This creates some unique opportunities not available with other types of retirement accounts. One could purchase a vacation or retirement home with Roth IRA funds and move in without any taxes at age 59½. And the home can be in the United States or in another country. One could also purchase precious metals with IRA funds and then take possession of the precious metals at age 59½ without owning taxes on the precious metal’s gain in value.
The Self-Directed IRA affords the retirement investor some great ways to save for retirement. The money can be invested in any type of investment one chooses, including real estate. The gains are either tax deferred or tax free, depending on the type of account chosen. This account type offers maximum flexibility in today’s turbulent markets.