What is a Traditional IRA?
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, meaning they are tax-deductible, and 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 funds towards a wide variety of investments, including alternatives like real estate and precious metals. A self-directed account is different than a standard account because it allows you to have more investment freedom.
Important features of a Traditional IRA
- Potential tax-deductible contributions
- Tax-deferred earnings
- Pay taxes when you take distributions on taxable amounts
- Required minimum distributions begin at age 70 ½
What are the eligibility requirements for a Traditional IRA?
An individual can open and make contributions to a Traditional IRA if both of the following requirements are met:
- Taxable compensation has been received during the year.
- 70 1/2 years of age has not been reached by the end of the year.
If an individual and their spouse have received compensation during the year, and have not reached 70 1/2 years of age, 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.
Is a self-directed Traditional IRA the right plan for me?
- Do you want to make tax-deductible contributions to a retirement account?
- Do you want to supplement the retirement saving options offered by your employer?
- Is your income within the income limits for contributing?
- Do you want the freedom to invest in what you know, whether it's stocks and bonds or real estate?
- Do you want to diversify your retirement portfolio with alternative investments?
If you answered 'yes' to all or most of these questions, a self-directed Traditional IRA may be a good choice for you.
Transfer or Rollover your funds to Entrust to get started
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. Contact us today to get started.
Before making contributions to a Traditional IRA, learn the contribution limits that apply: