American IRA Discusses Can Investors Make Self-Directed IRA Contributions Without Income?

ASHEVILLE, N.C., Oct. 22, 2018 /PRNewswire-PRWeb/ -- A Traditional IRA, or individual retirement arrangement, was created to provide working people with an independent vehicle for growing retirement wealth. A Self-Directed IRA is the same account, but only managed by the investor; this creates the possibility of using one's earned income as an investor pleases. But are contributions to a Self-Directed IRA limited to earned income alone? Recently, a post at American IRA explained this issue.

"Without taxable compensation," writes the post, "you lose all eligibility for a direct Self-Directed IRA contribution." That means that investors who want to grow their IRA will have to have some earned income on their taxes.

"It is important for people to remember who IRAs were created for in the first place," said Jim Hitt. "They are created for working people who want to put aside some of their money for retirement. The tax protections afforded by a Self-Directed IRA?or any type of IRA?are there to help reduce an individual's tax burden potentially, and even help them grow their money on a tax-deferred basis. One requirement of this arrangement is that, yes, it is important to have earned income."

Earned income can mean a lot of things to many different people?which is why the article went into detail as to what it means specifically for a Self-Directed IRA. Compensation would not include earnings and profits from property, interest, dividend income, pension or annuity income, unemployment income, or social security income. These more passive forms of income are not considered "earned" for the purposes of an IRA.

"There are lots of options for what you can do with your earned income in a Self-Directed IRA," said Jim Hitt. "But that does not mean you can use any old money! Investors also need to be wary of the fact that they need to have earned income to make potential contributions to these retirement investment accounts. And while that might sound like disappointing news to some, it does refer to a broad swath of retirement investors who have the ability to make these contributions."

For more information on earned income, the Self-Directed IRA, and more, visit http://www.AmericanIRA.com to read the blog or call American IRA at 866-7500-IRA.

"About:
American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $400 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.

As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term "they" refers to American IRA, located in Asheville and Charlotte, NC."

SOURCE American IRA, LLC