Turn Your IRA into Self-Directed Investments

• IRA stands for Individual Retirement Account.
• An IRA (Individual Retirement Account) allows people to save for retirement on a tax-deferred basis.
• Traditional IRAs allow investors to defer taxes on both capital and earnings.

Among the most popular and tax-advantaged ways to save for retirement is an individual retirement account (IRA). An IRA can defer taxation on your investment earnings until withdrawal and allow you to shelter those earnings from taxes.
Traditional IRAs, Roth IRAs, and some 401(k) plans allow you to invest in a variety of investment vehicles, including stocks, bonds, mutual funds, exchange-traded funds (ETFs), and real estate investment trusts (REITs).

Types of IRAs

If you have an IRA, you can invest your retirement savings in a self-directed IRA. This allows for greater control of where your investments are invested.
Although there are different types of IRAs, most IRAs fall into one of two categories: Traditional IRAs and Roth IRAs.
Traditional IRAs
Traditional IRAs allow you to defer paying income tax on your contributions until you take withdrawals from the account.

New contributions to a traditional IRA are not tax-deductible, but existing contributions can be, depending on your income. Withdrawals from a traditional IRA are taxed as ordinary income and may be subject to a 10% early withdrawal penalty if you're under age 591⁄2.

Roth IRAs
Roth IRAs differ from traditional IRAs in that contributions are made with after-tax dollars. This means that all withdrawals from Roth IRAs are tax-free, provided the withdrawals are at least 5 years old.

Roth IRAs also offer several benefits over traditional IRAs, including the ability to withdraw contributions and earnings at any time without penalty.

Traditional IRA

A traditional IRA is tax-deferred, which means you contribute money to your account and pay taxes only when you withdraw the money.
Roth
A Roth IRA is funded with after-tax dollars. It's completely tax free when you withdraw the money.

Roth IRA

With a Roth IRA, you can invest your contributions (not earnings) in alternative assets, including real estate, precious metals, and private equity. There are no income or contribution limits, although the maximum annual contribution is $5,500.
Traditional IRA
With a Traditional IRA, you can invest your contributions (not earnings) in alternative assets, including real estate, precious metals, and private equity. There are no income or contribution limits, although the maximum annual contribution is $5,500.

Rollover IRA

You can roll over a 401(k) or 403(b) plan into a traditional IRA without tax implications. You can roll over a SIMPLE IRA into a traditional IRA, but you will have to pay a 10% penalty if you withdraw money early.
Roth IRA
You can roll over a 401(k) or 403(b) plan into a Roth, but you get no tax benefit. If you roll over a SIMPLE IRA into a Roth, you have to pay tax and a penalty on the amount withdrawn.

A Roth IRA, unlike a traditional IRA, lets you withdraw your contributions without penalty. What's more, with a Roth IRA you will pay no taxes on any gains you accumulate in your Roth IRA.

SEP IRA

This type of IRA is similar to a 401(k) in that contributions to your account are tax-deductible and withdrawn taxes are deferred.

SIMPLE IRA
This IRA is a simplified version of the SEP IRA, and SIMPLE IRAs are probably the best option for small business owners.

Gold IRA: Should You Open One To Save For Retirement?

SIMPLE IRA

A SIMPLE IRA can be funded with up to $12,500 per year. However, a SIMPLE IRA does not allow for loans or transfers, cannot be rolled over from an employer plan, and does not allow for after-tax contributions.
Traditional IRA
A traditional IRA allows contributions of up to $6,000 per year, in addition to the amount of earned income. The contribution limits are adjusted annually for inflation.
Roth IRA
A Roth IRA allows contributions of up to $6,000 per year, in addition to the amount of earned income. The contribution limits are adjusted annually for inflation.