What Is A Self Directed Roth IRA?
If you want to be in total control of managing your finances and have a successful retirement plan then look into a self-directed Roth IRA account. These IRA's permit the person known as the "payee" into the account full power of where to direct or invest their funds that many other IRA's don't feature. All Roth IRA accounts have the appealing quality of withdrawing the funds without any tax payments as this type of IRA is tax free. This benefit does come at a price though as you cannot deduct your contributions made into these IRA's like you can with a traditional IRA, but more people fall into the Roth category than the traditional IRA investors, especially in today's economy.
If you are unsure about how to open a Roth IRA account, just simply contact any broker in your area. They will provide you with the proper paper work that will detail the implications of your investment, have the information for a Roth IRA custodian and also review the beneficiary rules that will apply to your account. As far as Roth IRA eligibility is concerned, you must fall into their guidelines for the annual income requirement that is the only true stipulation to Roth IRA account versus a traditional one. Considering you cannot qualify for an IRA tax deduction when investing in a Roth IRA account, they do allow you to catch up on your contributions should you qualify for one of these accounts and turn fifty years old by the end of that year. The income qualifications for a self-directed Roth IRA account are currently $120,000 per year for a single individual that files as the head of their household on their taxes, and for those who file jointly they have a combined maximum income limit of $170,000 per year.
You also have the freedom to make conversions that you can further investigate if this would benefit you by utilizing a Roth IRA conversion calculator. To better understand these conversions, a rollover IRA is basically a traditional one converted under certain rules. Those rules are that the account holder must have an annual income of $100,000 and nothing higher and recently a rule was altered for those making these conversions that they are permitted to pay the taxes owed on their funds from the conversion over a two year grace period versus all at one time. Quite possibly the biggest satisfaction of owning a self directed Roth IRA account is that you have the control to issue your own payments for certain qualifying purchases. The purchases that would qualify are buying a home or property of any kind, paying any outstanding balances owed on a property that you own (such as taxes or a mortgage payment) and in some cases even loaning funds out to other people. In fact when making real estate investments of any kind, you will notice the self directed Roth IRA is utilized quite frequently as it has that appealing feature of increasing the funds tax-free. Speak with a broker or be your own advocate and research it online before making any big decisions about your investments, but with the recent changes made by the IRS many are finding it much easier to begin saving for their future.
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