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Investing in Futures and Options with your IRA to Generate earnings that are Income Tax Deferred or even Income Tax Free

By Dennis Blitz, President, The IRA Club

Bob Miller thank you for giving me the opportunity to write about a little understood provision in the IRA regulations that may help any IRA account owner invest in the opportunities  that can provide the kind of returns people will need to achieve their financial  goals.

Over 97% of all IRA accounts are currently held at major Brokerage Firms and Banks that needlessly load up their IRA accounts with restrictions. These restrictions are there to benefit the Brokerage Firm more than they benefit the IRA owner. While many Brokerage Firms give lip service telling clients that their IRA account may be invested any way the account owner chooses, the reality is that the IRA Account owner is restricted to only those investments on that Brokerage Firm’s “allowable list”.

Two common investment opportunities often not found on the Brokerage Firm’s list are Futures and Options: Hence, over 97% of the IRA accounts are locked out of investing in this potentially profitable area.

Of course having a Futures and Options account is not for everyone however, if you want your IRA to invest in these and other alternative asset types shouldn’t you be allowed to?  Well its surprisingly simple; here’s how:

  1. First, you need to know that the Congressional Act that created the IRA, the IRS and the Department of Labor (DOL) have no restriction on your IRA investing in Futures and Options. The restriction is placed on your IRA by your IRA provider.
  2. Simply ask your Futures or Options brokerage to suggest an IRA company who will accept Futures Accounts or Manages Futures accounts.
  3. Call the new IRA company, they can answer any questions. Generally your IRA account can be opened over the phone.
  4. The new IRA company will transfer the funds you want from the former IRA Company.
  5. The new IRA company will sign your new Trading account application. (This is because your IRA is the owner of the trading account.)

That is it. Such an IRA account will cost you a few hundred dollars a year and will allow your IRA to invest as you (not a major Brokerage Firm) want to invest.

The IRA account can be a Traditional IRA, a Roth IRA, SEP IRA etc. There is no limit to the number of IRA accounts you own.

We hope this information was helpful,

Dennis Blitz
The IRA Club

Foremost Trading is not a tax advisor and cannot offer tax advice.

Post by Colson Hauser

Alternative Investment Specialist with Foremost Capital Management

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Contact your Foremost Alternative Investment Specialist for additional information
The Foremost Team (630) 485-2100 or (888) 818-0880

Disclaimer: Trading futures, options on futures, retail off-exchange foreign currency transactions (“Forex”), investing in managed futures and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. This website contains information obtained from sources believed to be reliable, but such information has not been independently verified and its accuracy is not guaranteed by Foremost Trading. Past performance is not necessarily indicative of future results. Any mention of performance in any context whether actual or hypothetical is no guarantee of future results. Foremost Trading became a registered ‘dba’ of RCM Alternatives in July of 2020. Please see full disclaimer here: https://www.rcmalternatives.com/disclaimer/