Many retirement accounts offer tax advantages to investors looking to grow their wealth. While company-sponsored 401(k) plans are widely popular, self-directed IRAs, as highlighted by Phoenix Capital Group, present a fantastic alternative.
Unlike traditional 401(k) plans, self-directed IRAs offer unique flexibility, allowing investors to choose from a much wider array of assets beyond bonds, mutual funds, and stocks. Here are some benefits of self-directed IRA investing and options for diversifying your retirement portfolio:
More Control
One of the main advantages of a self-directed IRA is the control it provides. You decide what to invest in and how to do it. This retirement account is not tied to your employer, meaning you don’t have to worry about rolling over a 401(k) if you switch jobs. You simply continue investing, regardless of where your career takes you. Additionally, financial professionals are available to help guide your investment decisions.
More Options
Self-directed IRAs offer a broader range of investment options than many company-sponsored 401(k) plans, which typically restrict investments to mutual funds, stocks, or bonds. With a self-directed IRA, you can invest in high-yield asset classes such as real estate and precious metals, helping to diversify your retirement portfolio and balance growth and income investments.
Potential Tax Advantages
Some assets available in self-directed IRAs can also be invested in directly, but without the same tax advantages. Both Roth and Traditional IRA plans offer potential tax benefits if you meet certain IRS qualifications. Traditional IRAs allow pre-tax contributions, with taxes applied upon withdrawal. Roth IRAs work oppositely; contributions are made post-tax, but withdrawals are tax-free. Many investors use a hybrid approach, investing in both Traditional and Roth IRAs to diversify their tax exposure.
Better Returns
Diversifying with a self-directed IRA can yield better returns than traditional assets. Alternative investments in these accounts can grow at higher rates than those available in most 401(k) plans. Self-directed IRAs also allow investments in smaller startup companies with high growth potential and causes you believe in. While these assets may present more risk, strategic IRA portfolio management can help mitigate that risk.
Corporate Bond Offerings
Investors can also leverage self-directed IRAs to participate in corporate bond offerings, gaining control over a broader array of investments, including corporate bonds from companies like Phoenix Capital Group. These offerings, targeting an annual yield of 9% to 13%, are compelling for self-directed IRA investors seeking direct exposure to the oil and gas industry. These bonds do not grant equity or ownership in the assets but provide a share of the proceeds. Though generally less risky than some other investments, they still carry some risk.
They are speculative investments in a company involved in minerals and oil and gas, offering less liquidity compared to other asset classes such as stocks. However, they offer the possibility of solid returns.
For those looking to diversify their portfolios with direct oil and gas exposure, Phoenix Capital Group regularly hosts investor webinars to provide insights into their bond offerings. Please note that this information is for general informational purposes only and should not be construed as investment advice or a recommendation of any specific investment strategy.
For more details on Phoenix Capital Group and its corporate bond offerings, visit phxcapitalgroup.com.