SHORTCUTS TO TOPICS ON THIS PAGE:
Why Self-Direct? Diversification Types of IRAs Peace of Mind
SHORTCUTS TO TOPICS ON THIS PAGE:
Why Self-Direct? Diversification Types of IRAs Peace of Mind
Most traditional IRAs and 401ks limit retirement investments to traditional assets like stocks, bonds, and mutual funds. A self-directed IRA (SDIRA) empowers you to invest in alternative investments of your choosing. An Alternative Investment is anything that is NOT a publicly traded stock, bond, or security.
As a self-directed IRA custodian, Preferred Trust enables individuals to break free of conventional investing, direct their own retirement strategies, and grow tax-protected retirement wealth through self-directed alternative investments.
Self-Directed IRAs were permitted in 1974 as part of the Employee Retirement Income Security Act (ERISA). Unlike conventional IRAs, self-directed IRAs empower depositors to select and control the investments in their retirement accounts. The term ‘self-directed’ means that you, as an individual, have complete control over selecting and directing the investments in your account.
With a self-directed IRA, you can use your personal knowledge and experience to identify high-yield investments, take advantage of niche opportunities, and explore investment options like real estate, digital currency, clean energy, oil and gas, agriculture, private placements, precious metals, and more. Or you can be the bank, providing private money loans and earning interest on loaned funds. A self-directed IRA can open the door to a wide array of high-yield alternative assets, provide a way to diversify your retirement portfolio, and potentially increase investment returns through tax-deferred growth.
To self-direct your IRA, you must work with a custodian who is licensed to “custody” the account, hold alternative assets, and administer account transactions. Working with a licensed, regulated SDIRA custodian like Preferred Trust is critical for maintaining the tax-protected status of your account.
Diversifying your retirement portfolio is a smart investment strategy that can reduce risk, enhance stability, and improve returns. Alternative assets have the potential to outperform traditional assets like stocks, bonds, and mutual funds, and with a low correlation to traditional investments, can act as a powerful buffer during market downturns.
Investment gains and income generated within the self-directed IRA can be tax-free (Roth IRA) or tax-deferred (Traditional IRA). Because a self-directed IRA claims 100% of the income generated by the investments in the account, your retirement funds can grow without restriction.
A self-directed IRA permits tax-free withdrawals of contributions, interest, and earnings after the age of 59 ½.
Consult your tax professional about the possibility of reducing your taxable income based on your filing status and income.
If you file a joint return, both you and your spouse can make IRA contributions, even if only one of you has taxable compensation. The amount of your combined contributions can’t be more than the taxable compensation reported on the joint return, regardless of which spouse earned the compensation. If neither spouse participated in a retirement plan at work, all contributions may be deductible.
You can contribute to a traditional or Roth IRA whether or not you participate in another retirement plan through your employer or business. However, you may not be able to deduct all of your traditional IRA contributions if you or your spouse participates in another retirement plan at work. (Roth IRA contributions may be limited based on income level.)
Consult with a qualified CPA or tax specialist to verify your maximum contribution limits. You can also find additional details here, in IRS Publications 560 and 590.
Under US Bankruptcy law, self-directed IRA assets are exempt from bankruptcy in amounts up to $1,000,000.
Certain self-directed IRAs allow the passing of assets to beneficiaries after death, with little or no tax liability.
Properly designating your beneficiary can be an important part of your lifetime plan. Without this designation, your heirs may be subject more income and estate taxes than necessary.
Beneficiary Options:
Traditional IRAs are tax-deferred, which means they are funded with pre-tax dollars. You can choose to fund your Traditional IRA by making a contribution, or transferring funds from an existing qualified retirement plan, such as 401k, pension plan, or other traditional IRA.
Contributions to this account are tax-deductible, with assets of your choice earning tax-free profits.
BENEFITS OF A TRADITIONAL IRA INCLUDE: |
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A Roth IRA allows you to fund a retirement account with after-tax dollars that grow tax-free. Qualified distributions are also tax-free. Investors may set aside after-tax income up to a specified amount each year.
BENEFITS OF A ROTH IRA INCLUDE: |
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A SEP IRA is a type of traditional IRA for self-employed individuals or small business owners. Any business owner with one or more employees or anyone with freelance income, can open a SEP IRA.
BENEFITS OF A SEP IRA INCLUDE: |
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A SIMPLE IRA plan provides small employers with a simplified method to contribute toward their employees’ and their own retirement savings.
BENEFITS OF A SIMPLE IRA INCLUDE: |
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Preferred Trust is a fully licensed, regulated, and audited financial institution headquartered in the State of Nevada. Operating as both an administrator and custodian of self-directed IRAs, Preferred Trust has served thousands of clients across the U.S. and custodied over $3.4 billion in alternative assets.
Our mission is to enable individuals to make sound alternative investments through guidance, support, advocacy, and education, and we are committed to integrity, care, and service excellence.
Our clients enjoy peace of mind with full transparency, up front disclosure of fees, and 24/7 account access.