3 Advantages of a Self Directed IRA for Those that Need Control of Their Assets

There is a lot of buzz these days about the advantages of self directed IRAs over conventional IRAs

. Surprisingly, many people believe that this flexible and convenient advantage is much more complicated than it actually is.

It's estimated that over 46 million Americans have a retirement account worth the net value of $4.75 trillion. Especially after experiencing what Congress's budget analysts estimated to be a $2 trillion loss in retirement accounts in October of 2008, many people want control over these assets.

Investment Retirement Accounts were originally created in 1974 to offset any lack of funds in case of a pension reduction or a crisis with the Social Security Administration. However, few people realize that traditional IRAs or 401(k)s are not the only type of retirement investment around. Self directed IRAs have been around just as long as the conventional forms of IRA that most of us are familiar with.

Compound Interest Combined with Tax Deferment

Just like a conventional retirement account, you are able to gain compound interest. When you look at this in the end, the amounts can be staggering. Let's say that you choose to forego that tall soy latte with vanilla that you have every day for $4 a day.

Take a look at these rough figures. You're now saving $120 a month--not too shabby. Now let's put that into your retirement account and say that you receive approximately 99% of the amount in compounded interest. After 10 years, you have about $23,000. And then after 20 years, you have upwards of $220,000. If you started saving by the age of 25, you would be able to retire at the age of 55 with over $566,000 (that is if you wanted to).

If you decided to invest that money in a regular brokerage account, you could expect as much as 30% to be taxed, resulting in more than a 40% loss in profits.

Large Tax Deductions

With the exception of a self directed Roth IRA, you will experience larger tax deductions on a yearly basis. If you were to contribute $2,000 a year, you would be able to deduct that from your taxable income every year (as long as you meet the income requirements presented by the IRS). Depending on your income and type of plan, you could qualify for over $50,000 in deductions.

Your Hard-Earned Assets Deserve Protection Against Creditors

Did you know that IRAs are protected from bankruptcy procedures under federal law? Essentially, you can feel assured that you won't lose investments. And if you go with a nontraditional IRA such as a self directed IRA, you could invest in real estate, mortgages, tax liens, structured settlements and more. Really, your options are practically limitless as long as you stay away from investments that are restricted by the IRS.

How Will You Create Future Wealth and Save for Retirement?

You have several options to save your money. Unfortunately, few offer the kind of advantages of self directed IRAs. By deciding to direct your funds, with the help of a passive custodian to oversee the administration, you have the power of your financial providence in your hands.

3 Advantages of a Self Directed IRA for Those that Need Control of Their Assets

By: Equity Trust Company

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