Don’t let traditional IRA limitations hold you back. explore the power of self-directed investing today to design your financial future!

Although we’re all familiar with the idea of designing our homes, not too many people know you can design your retirement savings too when you save with a self-directed IRA (SDIRA).

Why Use an SDIRA?

A self-directed IRA is a specific type of retirement account designed to create greater access to investment options. It enables diversification beyond traditional stocks, bonds, and mutual funds.

There are several types of self-directed IRAs, each with its own set of rules and benefits, offering various tax advantages such as tax-deferred growth or tax-free withdrawals. Typically, contributions to
IRAs can be made by the individual and, in some cases, by their employer, making them a powerful tool for building a nest egg and complementing other retirement plans.

Here are a few key differences to help determine which plan may fit your needs:

  • Traditional IRA. The 2024 contribution limit is $6,500 ($7,500 if you’re 50 or older). Contributions can be tax-deductible, while earnings grow tax-deferred until withdrawn in retirement.
  • Roth IRA. The 2024 contribution limit is $6,500 ($7,500 if you’re 50 or older). Contributions are made with after-tax dollars, but earnings grow tax-free, and qualified withdrawals in retirement may also be tax-free.
  • SEP IRA. The 2024 contribution limit is the lesser of 25% of compensation or $66,000. A SEP IRA is designed for self-employed individuals or small business owners. Contributions are tax-deductible, and earnings grow tax-deferred.
  • SIMPLE IRA. The 2024 contribution limit is $15,500 ($19,000 if you’re 50 or older). It is designed for small businesses with 100 or fewer employees. Both employer and employee can contribute, and earnings grow tax-deferred.

SDIRA Advantages for Real Estate Investing

Self-directing with retirement funds has increased in popularity during the past few years. Although they’ve been around since the 1970s, SDIRAs are still unfamiliar to many people. By designing your IRA to include real estate investments, you can potentially enjoy:

  • Diversification. There are myriad ways to invest in real estate: purchasing property outright, notes, deeds, and REITs. A single SDIRA can hold as many assets as you deem fit!
  • Tax benefits. By using an SDIRA, real estate investments can grow tax-deferred or even tax-free, depending on the type of IRA you choose.
  • Extrinsic market performance. Adding real estate to your retirement portfolio can provide a hedge against market volatility, as it often performs differently than traditional stocks and bonds.
  • Greater control. With an SDIRA, you have the power to select only the properties you want to invest in and make decisions based on your research and expertise.

Design Your IRA

Navigating the financial waters of self-directed investing can be complex. Fortunately, the process itself is relatively straight-forward:

  1. Find a reputable self-directed IRA custodian, like Digital Trust, that specializes in custody for real estate investments.
  2. Open and fund your self-directed IRA account.
  3. Research and choose the real estate investments that align with your individual goals and risk tolerance.
  4. Work with your custodian to complete the necessary paperwork and due diligence.
  5. Monitor your investments and adjust your strategy as needed.

Digital Trust provides a straightforward approach to help individuals achieve their retirement goals by eliminating barriers and opening retirement possibilities through a wide range of assets and trust administration services. By choosing to design your IRA with real estate investments, you can accelerate your retirement potential to achieve financial freedom on your terms. Don’t let traditional IRA limitations hold you back—explore the power of self-directed investing today to design your financial future!

  • Tara Bogard

    Tara Bogard is the SVP of Business Development for Digital Trust and has over 10 years expereience is the self-directed reitrement plan and alternative asset space. Tara has played an intregral role in creating exponential growth in the firms assets under custody. Tara's ability to think critically and out of the box is a tremendous asset to the team. Tara holds a Masters degree in business with a focus are on Organizational Communication from Murray State University, and a Bachelors degree in Organizational communication also from Murray State University.

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