TRADITIONAL SDIRATraditional Self-Directed IRA:
Opening an IRA Account
Interested in signing up for an IRA but want greater freedom to invest in what you want?
Learn how a Traditional Self-Directed IRA can benefit you.
What Is a Traditional IRA?
A Traditional IRA is an Individual Retirement Account (IRA) held at a custodial institution that may be invested in anything the IRS allows. If your employer does not offer a retirement plan, then a Traditional IRA is generally your best option for saving pre-tax money for retirement.
Traditional IRAs allow you to contribute to a retirement account with pre-tax dollars so that you can grow your retirement account tax-free until withdrawal.
The advantage of a Traditional IRA is that it allows you to take out your funds at a lower tax bracket if you predict you will make less at retirement age.
The only criterion for being eligible to contribute to a Traditional IRA is sufficient income to contribute.
This is in contrast to a Roth IRA in which contributions are never tax-deductible but qualified withdrawals are tax-free. The Traditional IRA also has more restrictions on withdrawals than a Roth IRA.
What is a Traditional Self-Directed IRA?
A Traditional Self-Directed IRA (SDIRA) is a self-directed IRA structured under a Traditional IRA account. However, unlike a Traditional IRA, a Traditional SDIRA allows the owner to invest in different types of assets based on his or her own wishes.
While Roth and Traditional IRAs allow you to invest only in stocks, bonds, mutual funds, and other common types of investments, SDIRA’s allow investors to invest in real estate, precious metals, and other alternative investments.
In all, a Traditional Self-Directed IRA is simply an IRA that puts the investor in more control of their future.
Benefits of a Traditional Self-Directed IRA
- Full freedom to invest in alternative assets.
- Greater account control.
- Tax-deferred investment growth.
- Assets are not taxed until withdrawn.
- Low fees.
Traditional IRA Rules, Limits, and Regulations
As is the case with any investment vehicle, there are rules and regulations that you must follow when investing in your Traditional IRA.
Some of the strictest rules surrounding Traditional IRA and Roth IRA investing involve the amount that you’re allowed to invest each year. For the 2023 tax year, the IRS is allowing investors to put a maximum of $6,500 into their IRA accounts for the year. If you are 50 years old or older, you can put $7,500 in your Roth or Traditional IRA, thanks to a $1000 catch-up clause.
While there used to be age requirements that prohibited anyone over 70.5 years old from investing in an IRA, those rules are no longer in effect.
Is a Traditional Self-Directed IRA Right for Me?
If you believe that you will land in a lower tax bracket after you retire, a Traditional, tax-deductible IRA is a great choice for you. When you deduct your contributions now, you lower your current tax bills while also setting yourself up to be in a lower tax bracket in the future.
In addition, if you want to invest in high-growth assets like real estate or cryptocurrency, consider a Self-Directed IRA.
Unlike other companies, Horizon Trust Company has low-maintenance costs and one continuous fee to help you manage your assets and grow your portfolio.
If you want to sign up for a Roth or Traditional Self-Directed IRA, complete one of our forms online or click the Schedule Now button to talk to a representative.
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Our mission at Horizon Trust Company is to provide education on the power of Self Directed IRA’s, to empower investors who are interested in diversifying their portfolios and gaining tax-free investment freedom. We are grateful and accountable to our clients and to each other. We respond promptly as we pull up and work as one to protect the financial assets of our clients and well-being of team members.
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Legal Disclaimer: Horizon Trust Company is an independent passive Custodian and is not associated or affiliated with and does not recommend, promote or advise any specific investment, investment opportunity, investment sponsor, investment company or investment promoter or any agents, employees, representatives or other of such firms or entities. Investments are not FDIC Insured, offer no bank guarantee and may lose value.