Retirement Plans

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Self-Directed Retirement Plans

Time was of the utmost importance and I was having delays in getting my funds transferred to my account in a timely manner. Greg was with me throughout the situation and made sure I was taken care of and satisfied until the end. Greg was professional, knowledgeable and courteous throughout the transaction….It was very comforting.

Sandy, Entrust Administration, Oakland

Discover the Benefits of a Tax-Free or Tax-Deferred Self Directed IRA

Retirement accounts provide the opportunity to save money for the future in a tax-free or tax-deferred environment. However, a self-directed retirement account allows the investor to benefit in a variety of alternative investment opportunities with the potential to earn even more.

Retirement plans for individuals come in all shapes and sizes. The most popular include Traditional Self Directed IRAs and Roth Self-Directed IRAs. For small businesses, Self Directed 401(k)s,  SEP Self Directed IRAs and SIMPLE Self DirectedIRAs are common. In addition, there are savings plans for special needs, such as Coverdell Self Directed Education Savings Accounts and Self-Directed Health Savings Accounts.

Individuals obtain these accounts for two key reasons:

1. Saving for a need, such as retirement, education or health care.
2. A method for reducing, deferring or eliminating taxes on the gains.
   

1.  The Power of Time and Earnings

The chart below shows how through time, your earning would grow depending on the difference in the earnings of the investment.

2. As a Tax-Savings Vehicle

Traditional Self Directed IRAs offer two big advantages or incentives to encourage people to save for their retirement. First, regular contributions to a traditional self directed IRA may be tax deductible on an IRA holder’s tax return (IRC Sec. 219(a) and (b)). Second, earnings on a traditional self directed IRA are not taxed until the IRA holder or beneficiary takes the money out. It is these regular deposits, accrued earnings, and the passage of time that combine to produce large account balances. And, with a  traditional self directed IRA, you can choose your investments.

Roth Self Directed IRA or Traditional Self Directed IRA?

Effective January 1 , 1998, IRC Sec. 408A, enacted under the Taxpayer Relief Act of 1997, permits the establishment of a Roth IRA. A Roth IRA is a type of IRA whereby contributions are not deductible, but distributions (including earnings) can be tax free if certain circumstances exist, particularly if the account is a Roth Self Directed IRA.

Understanding general tax law will assist in making the decision between the traditional IRA and the roth IRA. Your accountant may be able to assist you in determining the account that will best suit you.

Small Business Tax Benefits

Many employers choose a qualified plan to obtain the tax benefits. The tax benefits of qualified plans are worth noting.

Generally, contributions to a qualified plan by an employer are tax deductible. Earnings on funds held in a qualified plan accumulate on a tax deferred basis. As with plan contributions, earnings on contributions are not taxed until a distribution from the plan actually occurs.

Effective January 1, 2006, the establishment of a Individual Roth 401(k) was allowed. An Individual Roth 401(k) is a type of 401(k) that allows a small business owner the benefit of tax deductible contributions and non-tax deductible contributions. The non-deductible (Roth contributions) and the earnings can be distributed tax free if certain circumstances exist.

Learning about and using these accounts will help you meet your retirement planning goals.

Click on any of the links below for more information:

Plans for Individuals

• Traditional Self Directed IRA
• Roth Self Directed IRA
• SEP Self Directed IRA
• SIMPLE Self Directed IRA
  

Plans for Small Businesses

• SEP Self Directed IRA
• SIMPLE Self Directed IRA
• Self-Directed Defined Benefit Plans
• Self-Directed Defined Contribution Plans
• Self-Directed Individual (k) - With Roth Option
• Self-Directed Traditional 401(k) - With Roth Option
• Automatic Rollover Plan
  

Plans for Special Purposes

• Self Directed Health Savings Accounts
• Self Directed Education Savings Accounts
  

With the exception of certain prohibited investments, an Entrust Self Directed IRA, Self Directed Individual(k) or Self Directed HSA enables you to direct your funds into a wider range of both traditional or non-traditional investments. To discover the full range of investments available to you with a self-directed account, visit our investments section.