subject: Why the Advantages of Self Directed IRAs Offer Security as Life Expectancy Increases [print this page] As the average life expectancy increases, so does the average investor's interest in the advantages of a self directed IRA. According to the CIA World Factbook, the average life expectancy of a US citizen was 78-years-old in 2010. Compare that to a whopping 68-years-old in 1974 and the ten-year gap is immediately obvious.
When ERISA (Employee Retirement Income Security Act) was formed in 1974, both self directed IRA and conventional IRA guidelines were set forth. Concerns that the Social Security Administration would not be able to cover the living expenses of the average working citizen upon retirement were growing.
The minimum age of eligibility for social security is 62. In light of the fact that the average life expectancy was 68 in 1974, this seems like a necessity and even more so these days. Today, people are living longer and need to find new ways to provide adequate support for their family.
It's so important to plan for retirement early in order to have a strategy that will help you accomplish your final financial goal. Many smart investors are deciding to take advantage of a self directed IRA as an obvious advantage over conventional IRAs.
How a Self Directed IRA Provides Everything a Conventional IRA Has and More
When you start looking at the different strategies available, an Individual Retirement Account has some noticeable advantages over other types of retirement accounts, but only about 40% of households have an IRA account, much less an SDIRA.
There is an estimated $3 trillion invested in IRA accounts and most of the people that have these investments have put it in the hands of investment institutions and banks. By and large, these same people are not aware that they could manage their money much more efficiently through alternative investments.
Before our financial institutions had a monumental loss in mutual funds, stocks, and bonds between 2007-2009, the overall consensus of the average investor seemed to be that the SDIRA was too complicated. That viewpoint has changed considerably.
The Investment Opportunities of a Self Directed IRA are Endless
Since every SDIRA is required to be set up with a passive custodian, it is very important to have someone on your side that can help make this process simple. Obviously, you get to take control of your retirement funds, but in some cases, you may also be able to grow these funds either tax deferred or tax free. Essentially, the money that is generated by your IRA investments stays there, so you generate more income during the lifespan of the account.
The options for investing in this type of retirement account are largely dictated by what you shouldn't do rather than what you should do. This leaves a lot of freedom and flexibility.
How to Get Started Investing with Flexibility
The advantages of self directed IRAs are that you get to be in control of your financial future and your financial security, but the first step is to find someone that can help answer questions and guide you to creating an investment portfolio that works. Once it is setup, maintenance is easy.
Why the Advantages of Self Directed IRAs Offer Security as Life Expectancy Increases
