If you are considering opening an individual retirement account, take a closer look at the self-directed Roth. With a self-directed individual retirement account you gain control of all the important decisions, and have a larger scope of investment types to use in building wealth. Too often IRA’s are captive of a brokerage house that disallows all but a menu of traditional investment choices …stocks, bonds, mutual funds, and perhaps their own products . Wall Street has been volatile in this troubled economy, and the old way of investing has weakened many portfolios. With a self-directed individual retirement account, the account owner selects a custodian to house the IRA , and can choose one that allows other types of investments. As an investor, maybe you are interested in real estate or precious metals, tangible assets with attractive profit potential and better returns. The custodian company makes the investment transactions in the name of the account owner, and control resides only with the owner. The self-directed Roth individual retirement account maintains that control for the investor and marries that with the unique benefits common to all Roth IRAs. To qualify for the Roth, your income level cannot exceed $120,000 filing single, or $177,000 married filing jointly. There are contribution limits of $5000 per year , with an extra catch-up amount of $1000 for persons over 50 years of age . Contributions to any Roth are not deductable on income tax, but deliver a big payoff with tax-free distribution at retirement. So the profits from investments in the self-directed Roth individual retirement account grow in a tax-free environment and can be distributed without any additional tax penalty. Distributions can start as early as age 59 ½ as long as the account has been open for five years, and there is no required distribution mandated at age 70 ½. Unlike with a Traditional IRA, the account owner could continue contributing to the self-directed Roth individual retirement account indefinitely. Some investors who do not need the distributions may decide to let the money grow as a heritage for their heirs. The individual retirement account was created to help people save for retirement. The self-directed Roth option puts the investor in control of determining that financial future.

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Tags: individual retirement account, self directed ira, sep ira

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