Open a Self-Directed IRA Now to Build Your Tax-Advantaged Retirement Savings

Estimated reading time: 3 minutes

We’ll never know who first said, “Never put off until tomorrow what you can do today,” but we do know it is good advice. Especially when it comes to saving for retirement. If 2019 is the year you intend to really get your retirement savings into gear, why not start today? There are plenty of advantages to starting your retirement savings plans early in the year. Consider:

Consolidating Assets You Hold in Previous Employer’s 401(k)s

When you leave one job to take up a new position, deciding what to do with your existing 401(k) plan may not be at the top of your to-do list. But when you leave your assets in that plan, you have little or no control over how the funds are invested.

Most employer-sponsored 401(k) plans are administered by a bank or brokerage house, and they limit the kind of investments you may hold, most often allowing only a narrow range of equities, exchange-traded or mutual funds. As a result, their performance may not be what you need to achieve your retirement saving goals.

A Self-Directed IRA gives you far more freedom and control over the assets you invest in to save for your dream retirement.

If you do decide to exit a previous employer’s 401(k) plan, be smart about how you do it. If you are not yet 59½ years old when you take the distribution and fail to roll it over into another tax-deferred account (like an IRA), you will incur a significant early withdrawal penalty. Rolling the money into a Self-Directed IRA preserves the tax-advantaged nature of the funds and gives you more control over how to invest it. Learn more about rollovers here. 

Expanding Your Investment Horizons

When you open a Self-Directed IRA, the range of assets you may invest in expands dramatically. This puts you in control of how you invest, manage risk, diversify your portfolio, and hedge against inflation. Here is just a smattering of your options:

• Real estate: Whether you invest in rental property, open land, or mortgage notes, this is an asset most people know and trust.
• Precious metals: Historically, gold has been a hedge against inflation. Today, the industrial importance of silver, palladium, and platinum encourages even more diversification with precious metals.
• Private placements: Technology makes finding and investing in smaller entities, such as startups, hedge funds, and small businesses, easy.
• Secured and unsecured notes: Private lending can deliver potentially high returns.
• Energy: Clean power can be as good for your retirement savings as it is for the environment. You can invest in companies active in solar, bio fuels, water and wind power, green bonds, or energy-efficient housing,

And of course, if what you know best is stocks and bonds, you may invest in those as well. Read more about the alternative investment options available with a Self-Directed IRA.

Tax-Advantaged Revenue and Growth

The revenue your assets earn and their value growth are tax-free until you take distributions from your IRA. (Roth IRA distributions are not taxed because contributions are made with post-tax money.) This is a distinct advantage for assets like real estate that can both produce a revenue stream and appreciate in value. The sooner you start saving, the more time your assets have to produce revenue and add to your return on investment.

Take the First Step Now

The Entrust Group makes it easy to get started with self-directed retirement saving. Our online application has just three steps:

1. Information gathering
2. Applying (just 10 minutes!)
3. Funding your account

Don’t wait for tomorrow—take your first step today!

If you're an investor, you understand how being financially conscious during the holiday season is a great way to stay on top of your investments, as well as plan for the future.

As a bonus tip that will promote both financial security and beginning of the year preparedness: sign up for a FREE consultation with a trained Entrust professional today.