ASHEVILLE, NC / ACCESSWIRE / March 25, 2021 / What are the quirks of a Self-Directed Roth IRA? According to a recent post at American IRA, a Self-Directed IRA administration firm based in Asheville, NC, those quirks include the fact that there are no Required Minimum Distributions with a Roth IRA, unlike many other retirement accounts, and that the contribution limits are significantly smaller than other accounts, such as a Self-Directed Solo 401(k). The post, published at American IRA's blog at www.AmericanIRA.com, details what these quirks might mean for investors who are considering a Self-Directed Roth IRA.
In the first "quirk," American IRA highlights why Required Minimum Distributions are not present with the Self-Directed Roth IRA. Because a Roth IRA's taxes are front-loaded-in other words, investors use after-tax money to put into the Roth IRA-it is not necessary for the government to create RMDs to ensure that the money is eventually taxed. Instead, an investor can use a Roth IRA and allow it to grow even after the typical RMD age of approximately 70 years.
The second quirk was that Self-Directed Roth IRAs-and indeed, all Roth IRAs, which are the same-have lower contribution limits. Investors who are used to the higher contribution limits of a 401(k) have to note this, as the current limits (as of 2021) for a Roth IRA are $6,000 per year for those who are under the age of 50. Although there is no set monthly contribution limit, this essentially budgets to $500 per month, using basic division. These contribution limits are lower than many other retirement accounts, which is a quirk that investors have to pay attention to if they plan on maxing out a Roth IRA.
"This post talks about some of the unique features of the Roth IRA," said Jim Hitt, CEO of American IRA. "And you can see why many personal finance gurus like to talk about Roth IRAs. But it's important for anyone who's new to retirement investing to understand these quirks as they research the best solutions for them."
"American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $500 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals, and much more.
As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents, or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties, or agreements made by any such person or entity and do not provide any recommendation on the quality, profitability, or reputability of any investment, individual, or company. The term "they" refers to American IRA, located in Asheville and Charlotte, NC."
SOURCE: American IRA, LLC