Self Directed Traditional IRA
There are many types of IRAs, but smart and strategic investors know that a Self Directed IRA is the way of the future.
A Traditional Self Directed IRA is a tax-deferred retirement savings account that is the most common type of IRA in use today.
Self Directed IRAs may make a wide range of investments. With a Traditional Self Directed IRA, you receive an income tax deduction at the time of your IRA contribution.
Tax Benefits
- Contributions are tax-deferred, meaning that they are not subject to federal income tax until the time of distribution.
- If you anticipate being in a lower tax bracket when you retire, this type of retirement account may have significant tax benefits.
- Proceeds from the Traditional Self Directed IRA investment go directly to the IRA with no Federal Income Tax or Federal Tax filing.
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
- No income limitations
- The contribution deadline is April 15th
Distributions
- Distributions are penalty-free after age 59 ½.
- Distributions are subject to federal income tax.
- Starting in 2020, the Required Minimum Distribution (RMD) will begin at age 72
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 |
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 72 |
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