Ability to Invest Tax Deferred Funds Through a Self Directed Individual Retirement Account-
In addition to being able to invest money from an ordinary account into the futures market, investors can also capitalize on those benefits in a tax-deferred Individual Retirement Account (IRA).
For most investors, IRA investments are generally limited to stocks, bonds and mutual funds because most investors are not aware of the many different kinds of investments which can be made through an IRA. A vast majority of financial institutions which offer IRAs, typically limit investment options to stocks, bonds, and mutual funds.
Contrary to most typical IRAs, there are certain trust custodians who accept futures accounts. Such IRA’s are often referred to as a “self directed” IRAs. When you roll your assets into a self directed IRA, the assets can continue to grow tax deferred.
Before placing IRA funds into a futures account, funds from an IRA must be invested through a “self directed” IRA because an investor could suffer tax consequences if he transferred money from an IRA directly into a futures, or options account. In order to avoid such tax consequences, the investor can trade futures and options through a self directed IRA that is held at a trust company.
“Self directed” IRAs allow you to invest in managed futures, while still maintaining tax deferred growth because the assets are contained in an IRA.
If you do not already have a self directed IRA that accepts futures trading, you will have to open a self directed IRA through a trust custodian, and then open a futures account under the trust custodian’s name. There are several trust companies or trust custodians that offer self directed IRA’s that can utilize the futures and options markets. Your broker, or RCG Managed Futures, if you do not already have a broker, can help you with the process.
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