The idea of a "tax-free" future might sound like a pie-in-the-sky notion to some. But a recent post at American IRA, a Self-Directed IRA administration firm based in North Carolina, revealed how retirement investors can maximize the potential for tax-free retirement benefits by using what's known as a Self-Directed Roth IRA.
Within the confines of a Self-Directed Roth IRA, an investor uses after-tax money to invest. This money then grows tax-free for the duration of the investments. After a certain point, at which the investor matures to retirement age, they can then take out money from these retirement accounts without paying additional tax on the distributions. This creates what American IRA argues amounts to a largely "tax-free future."
The post, at AmericanIRA.com, points to an example of a 25-year-old saver who starts adding $60,000 per year to a Self-Directed Roth IRA. If this individual were to continue saving this way until the age of 68, a modest 6 percent annual rate of return would generate this individual some $1.1 million dollars—which are then tax-free as available in retirement.
"When someone uses the tax laws properly to fund their retirement, they have automatic returns," points out Jim Hitt, CEO of American IRA. "So many investors are focused on getting another 1% here or eliminating fees there, but what they fail to realize is just how powerful it is when you pay your taxes upfront. A Self-Directed Roth IRA allows investors to do that, which in turn gives them a far greater return than they might have imagined."
The post also went through a list of rules for the Self-Directed IRA, as well as rules for those who use a Self-Directed Roth IRA as part of a jointly-filed tax return. These considerations should play a big part of retirement investing for someone with a Roth IRA, the post argues. Continue reading.
For more information on the Self-Directed Roth IRA or to read the post, visit http://www.AmericanIRA.com or call 866-7500-IRA.
"About:
American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $400 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more. Read this here.
As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term "they" refers to American IRA, located in Asheville and Charlotte, NC."
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