Self Directed Traditional IRA
A Traditional Self Directed IRA is a tax-deferred retirement savings account that is the most common type of IRA in use today.
Self Directed IRAs may make a wide range of investments. With a Traditional Self Directed IRA, you receive an income tax deduction at the time of your IRA contribution.
Investment Ideas
Contributions are tax-deferred, meaning that they are not subject to federal income tax until the time of distribution.
If you anticipate being in a lower tax bracket when you retire, this type of retirement account may have significant tax benefits.
Proceeds from the Traditional Self Directed IRA investment go directly to the IRA with no Federal Income Tax or Federal Tax filing.
Individuals can contribute up to the annual limit
The 2023 limit is $6,500 for individuals under the age of 50
The 2023 limit is $7,500 for individuals over the age of 50
No income limitations
The contribution deadline is April 15th
Distributions are penalty-free after age 59 ½.
Distributions are subject to federal income tax.
Starting in 2020, the Required Minimum Distribution (RMD) will begin at age 72
Types of Self-Directed IRAs
| Self Directed Investment | Traditional | Roth | SEP | Simple |
|---|---|---|---|---|
| Make any investment that is not a prohibited transaction |
yes
|
yes
|
yes
|
yes
|
| Income Tax Deductible |
yes
|
no
|
yes
|
yes
|
| Must have earned income to make new contributions to an IRA |
yes
|
yes
|
yes
|
yes
|
| Unlimited amount transferrable from one IRA account to another IRA account |
yes
|
yes
|
yes
|
yes
|
|
Unlimited Earning Limits * using a Backdoor Roth |
yes
|
yes*
|
yes
|
yes
|
| Qualified distributions are taxed as ordinary income |
yes
|
no
|
yes
|
yes
|
| Qualified distributions are income tax-free |
no
|
yes
|
no
|
no
|
|
Annual required minimum distribution * must start at age 72 |
yes*
|
no
|
yes*
|
yes*
|
| Passes to a beneficiary | As a Traditional IRA account | As a Roth IRA account | As a Traditional IRA account | As a Traditional IRA account |
| Beneficiary can continue to invest the funds in the Inherited IRA |
yes
|
yes
|
yes
|
yes
|
| Super bonus for all IRAs |
no
|
no
|
no
|
no
|
|
Subject to probate * No, if there is a named beneficiary |
no*
|
no*
|
no*
|
no*
|
Learn more about the other types of Self Directed IRA accounts we offer or contact us today to learn more! 312-795-0988
