A Traditional IRA allows individuals to put aside tax-deferred money for retirement. Contributions are made from pre-tax dollars and the original funds will grow tax-free upon withdrawal.
A Traditional IRA is an Individual Retirement Arrangement, more commonly known as an Individual Retirement Account, which allows individuals to put aside tax-deferred money for retirement. Eligible contributions are made from pretax dollars and may be tax-deductible. Any interest, capital gains, or dividend income from the original funds will grow tax-deferred upon withdrawal.
With an Entrust self-directed Traditional IRA, an individual may have the ability to direct their retirement funds towards a wide variety of investments, including alternative investments such as real estate and precious metals. The Entrust platform does not offer investments, but instead makes it available for IRA holders to choose and hold the investment in their IRA. A self-directed account is different than other financial institutions' IRA offerings because it allows you to have more investment freedom.
An individual can open and make contributions to a Traditional IRA if taxable compensation has been received during the year.
If an individual and their spouse have received compensation during the year, an IRA may be established for each. However, if filing a joint tax return, only one spouse is required to receive compensation and is allowed to contribute on behalf of the other spouse.
If your current Traditional IRA does not allow self-direction, you can easily transfer funds to an Entrust self-directed Traditional IRA and gain access to a wide range of alternative investments, from real estate and gold to private stock and small business. You may also convert a 401(k) with a former employer to a self-directed Traditional IRA.
A Roth IRA is an individual retirement account that is funded with post-tax dollars. The tax benefit of a Roth IRA is that all earnings, including interest, capital gains, etc, grow tax-free. You pay income taxes on initial contributions, but you can withdraw the earnings tax-free as long as requirements are met.
Roth IRAs are a great retirement-savings account if you expect your tax rate to be higher in the future. That’s because you pay income tax on your money before contributing it to the Roth, so if your tax rate is lower now, it makes sense to pay taxes now in return for tax-free growth on your investment earnings.
In other words, Roth IRAs are a smart savings tool for young people just starting out, because they’re likely to face higher income tax rates as they move along in their career. But even someone who is further along on the career path may like a Roth IRA, because these accounts provide tax-free income in retirement.
An individual can open and contribute to a Roth IRA if both of the following requirements are met:
If you and your spouse have received compensation during the year, you can both contribute to your own IRA. However, if you are filing a joint tax return, only one of you is required to have compensation, and you can contribute on behalf of your spouse.
Contribution Limits: The amount that you can contribute to a Roth IRA is based on your modified adjusted gross income. As of 2010, there is no income limit if you are converting a traditional IRA or an employer-sponsored plan to a Roth IRA. Income limits only apply to annual contributions. Explore more information about Roth IRA contribution limits.
Distribution Rules: With a Roth IRA, you pay income taxes on initial contributions in the year they are made, but you can withdraw the earnings tax-free as long as certain requirements are met. In addition, you can withdraw your direct contributions at any time without penalty, as these funds have already been taxed. You can begin withdrawing earnings at age 59½, but, unlike Traditional IRAs, you are not required to take distributions at any age. More details about the distribution rules.
Investing in alternative investments like real estate is a popular strategy among clients at The Entrust Group. This is especially true for Self-Directed Roth IRAs - which have the benefit of tax-free distributions. This means any earnings gained from investments like real estate can be accessed 100% tax-free, provided you've met the other requirements for Roth IRAs as well. Learn more about investing in real estate with your Roth IRA.
If your current Roth IRA does not allow self-direction, you can easily transfer funds to an Entrust self-directed Roth IRA and gain access to a wide range of alternative investments, from real estate and gold to private stock and small business. You may also convert a Traditional IRA or a 401(k) with a former employer to a self-directed Roth IRA.
An HSA, or health savings account, is a tax-advantaged savings plan for people who are enrolled in a high-deductible health plan (HDHP). You can use the accumulated funds for medical expenses, such as prescriptions, eye care, dental, and some over-the-counter medications. The funds contributed to your HSA are tax-deductible, reducing your taxable income.
One of the many advantages of an HSA is that you don't have to use your contribution amount in any particular year. Instead, the funds continue to accumulate until you need them. You do not pay taxes on the earnings, and withdrawals are tax-free (as long as they are used for qualified medical expenses).
Another advantage of an HSA is that you do not lose the funds if you change health plans. Additionally, once you reach the age of 65 you can withdraw the funds without penalty and use your savings however you see fit.
To qualify for an HSA, you must meet the following requirements:
A self-directed HSA is different from a standard account because it allows you to have more investment freedom. Self-directed HSAs offer the unique opportunity to hold alternative assets, such as real estate, precious metals, and more. The earnings from these investments will grow tax-free, allowing you to save more for health expenses.
If you would like to transfer or roll over your existing HSA into a self-directed account, contact us today to get started.
Before making contributions to an HSA Plan, learn the contribution limits that apply:
Click here to view the HSA Contribution Limits
Before making contributions to a HSA Plan, learn the contribution limits that apply:
An Education Savings Account, also known as a Coverdell Education Savings Account, is a way to save for your child's education on a tax-free basis. Contributions to an ESA are not tax-deductible, but the investment earnings grow tax-free. By opening a self-directed ESA, you have the ability to grow the account faster than through traditional investments.
ESAs can be used to pay for educational expenses (tuition, books, fees) associated with qualified elementary and secondary schools, as well as higher education institutions. The funds must be used before the account owner reaches the age of 30.
To establish an ESA, the following requirements must be met:
If you answered 'yes' to all or most of these questions, an ESA may be a good choice for you.
A self-directed ESA is different from a standard account because it allows you to have more investment freedom. Self-directed ESAs offer the unique opportunity to hold alternative assets, such as real estate, precious metals, and more. The earnings from these investments will grow tax-free, allowing you to save more for education expenses.
If you would like to transfer or roll over your existing ESA into a self-directed account, contact us today to get started.