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 2024 limit is $7,000 for individuals under the age of 50
The 2024 limit is $8,000 for individuals over the age of 50
The 2025 limit is $8,000 for individuals over the age of 50
The 2025 limit is $8,000 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.
Required Minimum Distributions (RMD) will begin at age 73
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
