The CamaPlan Traditional IRA
The Traditional IRA (Individual Retirement Account) is the most common type of account that American workers use to save for retirement. Traditional IRA rules were set forth by the Employee Retirement Income Security Act (ERISA) of 1974, which established that employees are allowed to deduct qualifying savings contributions from their federal income tax returns up to predetermined annual limits. The advantage of a Traditional IRA is that contributions and earnings are tax-deferred, meaning that they are not subject to federal income tax until distributions are made. For individuals who anticipate being in a lower tax bracket when they retire, this type of retirement account may have significant tax benefits. Although many IRAs are administered and controlled by large brokerage houses, the IRS permits individuals to make their own investments, a process known as self-direction. A CamaPlan self-directed IRA offers its clients total financial control over their Traditional IRA retirement savings. We serve as the trustee required by the law, but you make your own decisions about the assets you want to own in your accounts, giving you the flexibility to invest in many classes besides the typical mutual funds and certificates of deposit. Call us today for a free consultation to discover the CamaPlan self-directed Traditional IRA advantage, and start on the path towards true financial freedom.
Who Is Eligible?
The basic definition of Traditional IRA eligibility is broad: anyone under age 72 is permitted to open one. Unlike the Roth IRA, there are not upper limits on adjusted gross income, as long as the account owner or their spouse earned enough income to make the contributions. Changes in Traditional IRA contribution limits are indexed to inflation. For the most current Traditional IRA calculator, please see IRS Publication 590 or consult with your tax professional. Qualified contributions are tax deductible to the annual maximum unless the person is considered an active participant in an employer-sponsored retirement plan. Check with your tax adviser to learn more about deductible and nondeductible IRAs based on employer retirement programs. Taxes on investment earnings in a Traditional IRA are deferred until distributions are made, as are the income taxes on the original contributions. It is important to know that Traditional IRA rates for taxes on distributions are the same for invested funds and earnings; there is not a lower capital gains tax rate on profits.
The Self-Directed IRA Advantage
The option to self-direct your Traditional IRA has been around for as long as there have been individual retirement accounts. The typical investor is unaware of the broad range of retirement investment options because the typical broker does not offer them. Whether you have a rollover IRA from a 401(k) or another retirement account, you can get more from your money from an IRA that is diversified. Brokerage firms make money by directing you to their financial products. They generally offer transaction based investments such as mutual funds, stocks, and bonds. A CamaPlan self-directed account puts you in the driver’s seat. There are very few categories of assets which are not allowed under IRS and U.S. Department of the Treasury regulations. Examples of excluded actions include self-dealing or transactions with disqualified persons such as relatives or a fiduciary. Beyond a very few limitations, you are free to use your tax deductible contributions to growth your wealth however you see fit. CamaPlan clients invest in real estate, mortgage notes, gold and silver, business ventures, and a myriad of other assets. When you control your money, you control your future.
Comparing Retirement Plans
The first step in choosing your self-directed IRA is determining which type of account is appropriate for your circumstances. CamaPlan offers every type of self directed individual retirement plan, including:
- Traditional IRA
- Inherited IRAs
Investors often ask us if they are better off investing in Traditional IRAs vs 401(k) retirement plans; if you are eligible, you can do both. A self-directed IRA from CamaPlan will allow you to greatly diversify the holdings in your portfolio, while most 401(k) plans offer some company matching funds. In looking at Traditional vs Roth IRA, the first question is eligibility, because the IRS does set an income limit on who may open a Roth (adjusted gross taxable income limits vary based on taxpayer filing status, ie, married filing separately, married filing a joint return, single, or head of household). Roth contributions are made after taxes; while you do not get the tax deduction up front, it may be beneficial if you anticipate being in a higher tax bracket later. In addition, qualified distributions will be tax free when withdrawn from a Roth. If your tax professional advises you to invest in a Roth IRA to reduce your future tax liability, CamaPlan can help you with converting a traditional IRA to a Roth retirement account. We can also answer question on transfers vs. rollovers and how to avoid early withdrawal penalties by opting for a direct rollover. Contact us for more information on selecting the best self-directed retirement account to meet your goals.
Opening a CamaPlan Traditional IRA
Opening a Traditional IRA with CamaPlan is easy. First, decide how you would like to fund your new account: rollover an existing IRA or 401(k), transfer from another retirement account, or make a cash deposit. Remember that rollover funds do not count against the annual Traditional IRA contributions, so you may still invest up to the limit to take advantage of the income tax deduction. Then it is time to use your experience and knowledge to select the assets you would like to hold in your account. As your own account director, you choose the asset and negotiate the terms, then CamaPlan transfers the funds and records the transaction according to IRS guidelines. CamaPlan also provides free investor education through our Cama Academy to instill individuals with the confidence to make informed decisions and grow their wealth.
CamaPlan: By Investors For Investors
Pennsylvania-based CamaPlan was founded by investors, for investors. CamaPlan’s highly-trained staff is well known for meeting the unique needs of individual investors, especially those interested in investing in alternative assets such as precious metals, real estate, mortgage notes, hedge funds, and structured settlements, the very types of high-yield assets that traditional money managers steer their clients away from. CamaPlan allows our clients to use their knowledge and experience to invest in what they know and understand, with no limitations other than IRS regulations. Our mission is to empower investors to make their individual retirement accounts work harder and smarter for them; we sell no products, so our only interest is in helping you meet your goals. Contact CamaPlan today to open your self-directed Traditional IRA and see your retirement goals grow closer every day.