Make the switch from traditional or Roth IRAs to precious metals-backed gold IRAs with ease by choosing a company with comprehensive educational resources and an easy transfer process, like Augusta Precious Metals which provides free investor kits as well as an accessible guide that details fees, custodian options, minimums and storage facilities.
Diversify Your Retirement Savings
Financial freedom is an integral goal of retirement for many people, meaning having enough funds to cover expenses without feeling restricted by financial limitations.
Diversifying your portfolio is one way to do this, by investing across different asset classes such as stocks, mutual funds, bonds and cash. Low correlation assets also provide some protection from market volatility: If one investment incurs losses while another gains value and thus lowers overall risk.
Not only should you diversify your investments, but investing in alternative assets like real estate, small businesses or cryptocurrencies can help reduce taxes on savings. Tax-advantaged accounts like the self-directed IRA or Solo 401(k) offer another means for saving for retirement that allows you to allocate traditional and alternative investments without restrictions or limits.
Protect Your Assets
Many people do not realize the extent of their assets being at risk from lawsuits and creditors, including both real estate and retirement accounts. If someone is injured on your rental property and files suit against it beyond insurance limits, or professional services could face malpractice suits as a result. While you can take measures such as purchasing malpractice insurance to protect yourself against liability claims, creating formal legal protection will best ensure your assets.
Assets held within traditional and Roth IRAs tend to be safe from creditors, along with assets held within employer-sponsored 401(k) plans and 403(b)s offered by non-profits, governments, and churches. However, inheritance IRAs do not enjoy this level of protection and can be taken by creditors at any time. Furthermore, withdrawals made before age 59 1/2 could incur penalties of 10% along with taxes – exact rules depend on where you live – so contact your tax advisor for more details.
Minimize Taxes
Strive to maximize IRA contributions each year to reduce tax obligations while giving your money more time to grow, as well as avoiding paying higher rates in future for retirement savings accumulation.
Procrastinators might find it easier to make one large contribution around January as soon as their tax filing deadline arrives, but this approach can cost more in the long run.
Dollar-cost averaging is an effective strategy to use when contributing to an IRA; this method enables you to invest the maximum while keeping costs manageable and eliminating market timing risk. Furthermore, this technique may reduce taxes when taking required minimum distributions (RMDs). Care should be taken when considering this decision with the advice of financial professionals.
Increase Value
Make compounding part of your investment strategy to expand your IRA. Compounding involves reinvested returns generating even more returns which in turn are reinvested, creating an increasing snowball effect and expanding your nest egg over time. The longer money compounds, the bigger will become your nest egg.
Financial professionals recommend saving as much money throughout the year to maximize your IRA contribution, rather than waiting until tax filing deadline to make contributions from prior years. They cite how waiting until then would deprive savings the opportunity to compound for up to 15 months more before filing taxes next year.
As a small business owner or self-employed worker, you may qualify to open either a Simplified Employee Pension (SEP) IRA or Savings Incentive Match Plan for Employees (SIMPLE). To be eligible, either three out of the last five years must have passed since becoming an employer, or you must anticipate earning at least $5,000 this year to meet qualification. Funds from previous employer-sponsored accounts may also be transferred.
