In this video, you will learn the differences between a Self-Directed Traditional IRA and a Self-Directed Roth IRA, and the advantages of both account type.

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Video Script:
What is a Self-Directed Traditional IRA?
A Self-Directed Traditional IRA is a tax deferred retirement account that’s funded with pre-tax dollars.
You will not be taxed on the funds in your Self-Directed Traditional IRA until you take a distribution, or withdrawal.
What is a Self-Directed Roth IRA?
A Self-Directed Roth IRA is a retirement investment account that provides a different type of tax advantage.
With a Self-Directed Roth IRA, you contribute after-tax dollars to your retirement account. The primary benefit of a Self-Directed Roth IRA is that your gains will grow tax free because you pay
taxes when contributing to your IRA. Your earnings can be withdrawn tax-free after age 59 ½ if your account has been open for at least five years.
Which is the Better Self-Directed IRA for Me?
Self-Directed Traditional IRAs are beneficial for individuals who believe they will be in a lower tax bracket in retirement. Self-Directed Roth IRAs are perfect for investors who believe they are currently in a lower tax bracket than they will be in retirement. We understand you may have questions about which retirement account is right for you.
Madison Trust’s Specialists are here to help.

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When it comes to retirement planning, individuals have the option of different types of Individual Retirement Accounts (IRAs) to choose from. Two popular choices are Traditional IRAs and Roth IRAs, both of which offer tax advantages for retirement savings. However, there are key differences between the two, especially when it comes to self-directed IRAs. Self-directed IRAs allow for a wider range of investment options, including real estate, private equity, and precious metals, among others.

Madison Trust Company offers both self-directed Traditional IRAs and self-directed Roth IRAs, providing investors with the flexibility to choose the best option for their retirement goals and investment preferences.

A self-directed Traditional IRA allows individuals to make tax-deductible contributions, which can help lower their taxable income for the year in which the contributions are made. The funds in a Traditional IRA grow tax-deferred, meaning no taxes are paid on the earnings until the funds are withdrawn during retirement. This can be advantageous for individuals who expect to be in a lower tax bracket during retirement, as they may pay less in taxes on their withdrawals.

On the other hand, a self-directed Roth IRA offers different tax advantages. Contributions to a Roth IRA are made with after-tax dollars, meaning they are not tax-deductible. However, the funds in a Roth IRA grow tax-free, and qualified withdrawals in retirement are also tax-free. This can be beneficial for individuals who anticipate being in a higher tax bracket during retirement, as they can enjoy tax-free income during their golden years.

When it comes to self-directed IRAs, both Traditional and Roth IRAs offer the same investment options. However, the tax implications differ between the two. With a self-directed Traditional IRA, investors must start taking required minimum distributions (RMDs) by age 72, whereas with a self-directed Roth IRA, there are no RMDs during the original account owner’s lifetime, allowing the funds to continue growing tax-free for as long as the owner lives.

Choosing between a self-directed Traditional IRA and a self-directed Roth IRA depends on an individual’s specific financial situation and retirement goals. Madison Trust Company offers personalized guidance to help investors make informed decisions about which type of self-directed IRA is right for them.

In conclusion, self-directed Traditional IRAs and self-directed Roth IRAs both offer tax-advantaged ways to save for retirement with the added bonus of a wider range of investment options. Madison Trust Company provides individuals with the opportunity to create a self-directed IRA tailored to their unique financial needs and investment preferences. With the flexibility and control that comes with self-direction, investors can build a retirement portfolio that aligns with their long-term financial goals.