In the U.S., one of the best ways for individuals to protect their income from taxes and save for retirement is by using an individual retirement account (IRA). IRAs come in many forms that can be tailored to specific individual preferences. However, significant rules and regulations have been developed and initiated by the IRS and the U.S. Treasury department that can make the use of IRAs quite confusing. Two of the main IRAs are self-directed IRAs and Roth IRAs.

Self-directed IRAs are ones that are controlled by the individual. These accounts are established between the individual opening the account and a stockbroker. The individual is then in control of all the money that he or she wishes to invest. Roth IRAs can be opened through a broker, mutual fund or bank. Contributions made toward a Roth IRA are made on an after-tax basis; however, the key to the Roth IRA is that it provides tax-free growth.

Fortunately, individuals who have self-directed IRAs or Roth IRAs can trade in the forex market as an investment. In order to do this, a forex trading IRA must be opened. Individuals who do this benefit greatly from being able to day trade tax free. Using forex within a retirement plan also provides added diversification that can be used to add stability to an investor's returns. Furthermore, individuals who already have assets invested in other IRA accounts are able to transfer those assets into a forex IRA account by filling out the necessary paperwork.

As with traditional IRAs, forex IRAs can either be self-directed by the individual opening the account, or managed by a professional forex manager.

To learn more, see Tax-Saving Advice For IRA Holders, Ten Tips For Achieving Financial Security and Traditional IRA Deductibility Limits..

  1. What are the main advantages of a self-directed IRA?

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  2. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  3. What are the main kinds of annuities?

    There are two broad categories of annuity: fixed and variable. These categories refer to the manner in which the investment ... Read Full Answer >>
  4. What are the risks of rolling my 401(k) into an annuity?

    Though the appeal of having guaranteed income after retirement is undeniable, there are actually a number of risks to consider ... Read Full Answer >>
  5. How do I get out of my annuity and transfer to a new one?

    If you decide your current annuity is not for you, there is nothing stopping you from transferring your investment to a new ... Read Full Answer >>
  6. Are Cafeteria plans exempt from Social Security?

    Typically, qualified benefits offered through cafeteria plans are exempt from Social Security taxes. However, certain types ... Read Full Answer >>
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