INVESTMENT STRATEGY: SDIRAs
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Design Your IRA for Financial Freedom DON’T LET TRADITIONAL IRA LIMITATIONS HOLD YOU BACK. EXPLORE THE POWER OF SELF-DIRECTED INVESTING TODAY TO DESIGN YOUR FINANCIAL FUTURE!
TARA BOGARD
A lthough 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
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
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tax-deductible, while earnings grow tax- deferred until withdrawn in retirement.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.
46 | think realty magazine :: may - june 2024
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