Roth Self Directed IRA
A Roth Self Directed IRA is a tax advantaged retirement savings account.
A Roth Self Directed IRA is a tax-advantaged retirement savings account. Self Directed IRAs may make a wide range of investments. With a Roth Self Directed IRA, account distributions are tax-free.
Tax Benefits
- Contributions are subject to federal income tax. However, you will not need to pay taxes at the time of distribution.
- If you anticipate being in a higher tax bracket when you retire, this retirement account may have significant tax benefits.
- Proceeds from the Roth Self Directed IRA investment go directly to the IRA with no Federal Income Tax or Federal Tax filing.
- Your beneficiary
will inherit a Roth IRA.
Contributions
- Individuals can contribute up to the annual limit
- The 2023 limit is $6,500 for individuals under the age of 50
- The 2023 limit is $7,500 for individuals over the age of 50
- Adjusted gross income (AGI) must be below certain limits
- The IRS allows individuals to convert a Traditional IRA into a Roth IRA
- Anyone can contribute with a Backdoor Roth
- The contribution deadline is April 15th
Distributions
- Distributions are penalty-free after age 59 ½
- There is no Required Minimum Distribution.
- Distributions are not subject to federal income tax
Learn more below on the primary differences between a Traditional & Roth IRA!
|
Self Directed Investment |
Traditional |
Roth |
|
May make any investment that is not a prohibited transaction |
YES |
YES |
|
Money In |
||
|
Contributions |
Are Income Tax-Deductible |
Are Not Income Tax-Deductible |
|
To make a new contribution to an IRA |
Must have Earned Income |
Must have Earned Income |
|
Transfers from one IRA account to another IRA account |
Unlimited Amount |
Unlimited Amount |
|
Earning Limits (2022) |
Are Unlimited |
Are Unlimited using a Backdoor Roth |
|
Money Out |
||
|
Qualified distributions are |
Taxed as Ordinary Income |
Income Tax-Free |
|
Must take an annual Required Minimum Distribution |
YES-Must start at age 70½ |
NO Required Minimum Distribution |
|
Passes to a beneficiary |
As a Traditional IRA Account |
As a Roth IRA Account |
|
If You Die |
||
|
Can your beneficiary keep investing the funds in the Inherited IRA |
YES |
YES |
|
Super Bonus for all IRAs Will the IRA be subject to probate? |
NO IRAs do not go through Probate if there is a named beneficiary |
NO IRAs do not go through Probate if there is a named beneficiary |
Learn more about the other types of Self Directed IRA accounts we offer, or contact us today to learn more! 312-795-0988