Using traditional investments, like stocks or bonds, is a typical way to save for retirement. However, you can also use a self-directed IRA in real estate to prepare for the future. Taking this action offers a way to own undeveloped land or rental properties in an IRA and take advantage of its tax benefits at the same time.
Provides Tax Advantages
When you utilize a self-directed IRA in real estate, it comes with a tax advantage. When you retire, you’ll have the ability to withdraw your earnings and not have to pay taxes. Initial contributions are completed by using after-tax dollars. Using this type of investment vehicle while you’re young can be highly beneficial in the future if you grow your account to a sizable value as you won’t have to pay taxes on the withdrawals you take.
Offers a Way to Diversify Your Portfolio
Another advantage of using a self-directed IRA in real estate is its ability to diversify your portfolio. Choosing to utilize this investment vehicle lets you invest in commercial or residential rental properties and other nontraditional assets like real estate investment trusts (REITs). Owning these assets is an excellent way to offset traditional investments you might hold in stocks or mutual funds.
Working with a Knowledgeable Financial Planner
If you’re interested in diversifying your retirement portfolio into nontraditional investments, it can help to work with a knowledgeable financial planner who handles these types of strategies. If you’d like to learn more about this opportunity, be sure to visit the website.
