What is the difference between a Roth IRA and a self-directed IRA? Can you have both at the same time?

Answer 1

"Self-directed" simply means that you are making the investment decisions for the IRA, and that many choices are available to you. For example, an IRA account that you open at Schwab is self-directed because you can pick from 1000s of mutual funds plus buy stock. An IRA account at a bank that only offers CDs is not self-directed. You don't have the choice of what investments to make. Most (or all) types of IRA can be self-directed, including Roths and Traditional IRAs.

There are several types of IRA. One is the Traditional IRA where you put money in and take a tax deduction for the contribution. When money comes out of the Traditional IRA, you are taxed on all of it.

Another is the Roth IRA where you put money in and DO NOT take a deduction for the contribution With a Roth, when you later take your contributions and gains out, you pay no taxes.

There are other types of IRA: the SEP, the SIMPLE, etc., which you did not ask about.

Answer 2

A roth IRA is an individual retirement account that will defer taxes on the money invested until you either A. withdrawl the money, B. Retire. You may withdrawl funds after 5 years of having an open account or make contributions up to 70 years of age ar until you retire. A self directed IRA is just that, you decide where your money is invested in the IRA be it stocks, bonds, mutual funds etc. The difference is that I believe with a self directed IRA the money is taxable while you are saving up your money. A Roth IRA is a better way to go because you earn more money because all the money you are saving builds tax free until you retire.

Answer 3

I am not familiar with the term self directed IRA. A Roth IRA is an IRA where all contributions are taxed, you do not have to pay taxes on interest earned. A Traditional IRA is an IRA where contributions are Tax Deferred, meaning you pay taxes when you withdraw from the IRA. You may have both types of IRAs. At the credit union where I work in order to have two different IRAs you must put them on separate accounts. Does that help?

Answer 4

Those are not mutually exclusive things. A Roth IRA could be self-directed (if the IRA custodian offers that type of service), or it could not be. Yes, you can have both, just like you could have a savings account and a checking account; there is no either/or requirement.

Check out Equity Trust Company (www.trustetc.com) for more info on self-directed IRAs and other IRA classifications, as well as the benefits of self-directed vs. the usual type (where you have little control and fewer options)

Answer 5

a roth is where you pa taxes up front, where as a self directed ira is where you tell the investment company where to invest the money. you should be able to have an roth ira

Answer 6

from what i know, a roth is has a bit more flexibility as far as withdrawals, tax consequences, contributions etc.depending on the purpose, and also has some better perks for educational use with lowet taxation . A self directed would apply more to an entrepreneur type of situation because you must put aside funds as being your own employer.

Answer 7

Triple thumbs down on the overseas money answer. Thumbs as a lot because the answer with the help of Jim S (the first answerer - i wish I were given his call proper). besides the undeniable fact that, i imagine he replaced into unduly careful about the self-directed function. i trust someone can effectively make investments his own 401k money. It does take your time funding, yet in case you keep on with mutual money it truly is more desirable uncomplicated and a lot less volatile.