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Selecting Self-Directed Retirement Plan

For most investments a self-directed IRA works quite well particularly if you want to invest in a single parcel of real estate. A choice can also be made between a ROTH IRA and a traditional IRA. A ROTH IRA offers several advantages, the principal being the tax free distribution of income at retirement. With a traditional IRA the earnings are fully taxable at ordinary income rates upon distribution.

On the other hand if you want to invest in an ongoing business or franchise, a solo 401(k) may be better suited. While this plan is more complicated to operate, it can offer the following benefits:

  • Lower custodian fees
  • Lower taxation (no unrelated business income tax)
  • Full asset protection. A 401(k) has greater protection from personal creditors than does an IRA.
  • You can borrow from a 401(k). Many employees have this feature with their plan at their current employer and if you establish a solo 401(k), you can have this feature with your self-directed account.

We will advise you on the best plan and establish the plan for you.

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