Self-directed IRAs are used by people who want to choose their own retirement plan investments. After all, who is better qualified to secure a successful future for yourself than you are? If you agree, we encourage you to explore a new retirement planning strategy for 2023: Resolve to get involved with a hands-on approach to build your retirement wealth.
Self-Direction Gives You Total Control of Your Retirement Plan Investments
Self-directed IRAs and other savings plans allow you to invest in alternative assets to the stock market–assets that don’t depend on or revolve around Wall Street norms.
What does this mean in simple terms?
- You choose your own assets; no more blind trust in advisors and custodians who limit your plan to investments they promote and sell.
- Relief from wild stock market roller coaster rides.
- Alternatives to the paltry returns of bonds mutual funds.
Instead, you invest in alternative assets like real estate, gold, private equity, private lending, and more.
These alternative investments have the potential to reap higher gains, sometimes in a shorter time frame than the same earnings are realized by bonds and mutual funds. Also, many alternatives may present more stability than stocks, which performance depends on the daily state of the market.
Plus, you choose the investments for your plan using your personal knowledge and expertise, and you get to invest within your own comfort zone.
Advanta IRA believes that knowledge is power, control is key, and diversity is essential to the ultimate success of every retirement portfolio.
To maximize the premise behind that belief, we encourage you to analyze the hits and misses your current plan has experienced in the past year and reevaluate your approach to achieve the retirement income of your dreams.
Knowledge Is Power.
Especially when choosing alternative investments.
The more you personally know and understand the assets in your retirement and savings plans, the better your chances of being able to invest in opportunities that can potentially build greater wealth in these accounts.
Advanta IRA provides a powerful educational platform featuring case studies and eBooks, educational events, timely articles, and weekly podcasts designed to arm you with the knowledge to take control and confidently invest your retirement funds to achieve the retirement future you deserve.
Control Is Key to Successfully Manage Your Retirement Income Growth.
Self-direction gives you total and complete control over your own retirement funds and investment decisions. But you must work with the best self-directed IRA service provider who can help you navigate the compliance details of self-direction so you can focus on identifying promising investments for your portfolio.
Advanta IRA leads our industry in self-directed retirement plan services. We currently oversee more than $2 billion in client assets under management. We deliver unsurpassed personal service in the administration of your plans with us. We ensure all elements of the administration of your account(s) are performed properly and in compliance with Internal Revenue Service rules and regulations. We file reports on your behalf, issue statements, and help you follow contribution limits and permissible transaction guidelines.
Diversity Is Essential to the Health and Success of Your Retirement Portfolio.
Alternative investments offer a variety of diverse choices:
- Real estate (single and multi-family homes, commercial and rental properties, rehabs, improved and unimproved land, tax liens and deeds)
- Private lending options (notes and mortgages)
- Precious metals (gold, silver, palladium, and platinum)
- Private placements, private stock, and crowdfunding opportunities
- Single member LLCs (checkbook control)
- Foreign exchange and futures trading
- Oil, gas, cattle, and timber options
- Accounts receivable
- And many more alternative assets
Not only do alternative investments provide diversity, but different types of self-directed accounts do, as well.
Below are self-directed retirement plans available, along with their qualifications and benefits that can help you decide which account best fits your needs.
Retirement plans that can be self-directed:
Traditional IRAs: These individual retirement arrangements allow pre-tax savings for most investors. Tax is paid once you reach retirement age and begin taking distributions. You can fund a traditional IRA by rolling over funds from another IRA, employer plan, or pension plan. You may also make allowed annual contributions on a pre-tax basis.
Roth IRAs: Contributions are made after tax, but the earnings grow on a tax-free basis provided that certain requirements are met. In most instances, the amounts you have contributed may be withdrawn at any age with no tax liability. When you reach the age of 59 1/2 years and the Roth account has been funded for at least five years, you can take tax-free withdrawals of both contributions and earnings.
Simplified Employee Pension Plans (SEP IRA): These are low-cost, easy plans utilized by the self-employed, partners, and owners of corporations or side businesses. Employers and employees, if any, make contributions to individual traditional IRAs owned by the employees, established at institutions of their choice. All employees must receive the same benefits. Plan participants are taxed at ordinary income tax rates when distributions are taken after they reach the age of 59 1/2 years.
Savings Incentive Match Plan for Employers (SIMPLE IRA): A plan designed for small employers (including self-employed individuals) to offer employees. (The term “employee” includes a self-employed individual who receives earned income.) Employees elect to defer a percentage of pre-tax compensation each pay period into the account. The employer contributes the salary deferral, along with a matching amount from the employer. Contributions and earnings in this plan are not taxed until withdrawn in retirement.
Solo 401(k) Plan: This is a profit-sharing plan with a 401(k) option, but less complicated and not as costly as a traditional 401(k). The types of businesses that can establish a solo 401(k) include corporations, partnerships, and sole proprietorships. This plan is a good fit if you have no employees or if you are a business where only the only employees are the owners of the business and/or certain family members. A solo 401(k) also features a Roth component that allows you to make salary deferral contributions on a post-tax basis and place them into a tax-free account similar to a Roth IRA. Profit-sharing contributions are still considered a pre-tax contribution.
You can even self-direct health savings accounts (HSAs) and education savings accounts (ESAs). And, if you’re unsure what to do with unused funds still housed in an old employer’s plan, you can roll those over into a self-directed IRA or solo-k.
For each of the plans outlined above, there are IRS eligibility requirements, varying yearly contribution limits, and distribution rules. You can find additional information about these accounts by visiting the self-directed plans section on our website. It is important that you consult with a trusted tax or financial professional to determine which retirement plan best fits your current situation and needs.
Resolve to Get Involved with Your Retirement Plan Investments
Regardless of your income level, whether you have an established retirement plan or if you are considering opening one, self-direction provides significant benefits that can help you accumulate the retirement wealth you desire.
Take control. Make your own decisions. Build the wealth you need to secure a successful retirement future.
When you take more of a hands-on approach with your retirement plan investments, when you put your own knowledge to work—you’re better able to control your investments and create essential diversity to maximize the earning potential of your retirement portfolio.
If you want to learn more, contact Advanta IRA today.
Additional reading on retirement planning:
Retirement Planning Checklist for 2023