Kaaren Hall, CEO, uDirect IRA Services

Guess what?  We’re living longer!

U.S. life expectancy in 2020 was 77.0 years. One hundred years ago life expectancy was around 54 years.  As a result, you are likely to spend more time “retired” than your grandparents.  Saving for this season of life is crucial to your well-being.   So how long can you contribute to a self-directed IRA?  The answer is, as long as you have active income.

What is Active Income?

Active income is defined as salary earned from services rendered according to an agreed task, within a specified time frame. Examples of active income are salaries, tips, fees, and allowances from the companies you provide services.

When you have active income, you can contribute to an IRA or Solo 401(k).  You can contribute to a Roth IRA indefinitely as well.  You can’t contribute an amount that exceeds your earnings, and you can only contribute up to the annual contribution limits set by the IRS.

When do you have to withdraw your IRA funds?

Do you have a Traditional IRA?  You must start taking required minimum distributions when they reach 72.  Now Congress is considering the Securing a Strong Retirement Act (also called The Secure Act 2.0).  This Act passed the House on March 29th and is heading to the Senate with bipartisan support.  The Act, if passed as is, would gradually raise the age at which RMDs are required up to 75.

The Extra 23 Years

Plan now to spend those extra 23 years being financially fit.  According to a survey by the Transamerica Center for Retirement Studies, the median retirement savings by age in the U.S. is: Americans in their 20s: $16,000. Americans in their 30s: $45,000. Americans in their 40s: $63,000.  Talk with your financial advisor and tax professional about how much you will need for the future.  Investing in alternative assets using a self-directed IRA or Solo 401(k) is one way to make that future better.

To learn more about self-directed investing, contact us at uDirect IRA Services.  We are happy to walk you through the process.

Attention:

uDirect IRA Services staff is working both from home and from our offices in response to COVID-19. Rest assured, we are fully operational and ready to help with your retirement needs.