We are pleased to let you know about a new opportunity allowing OurCrowd investors to fund investments through IRA custodial accounts.
What is an IRA?
An Individual Retirement Account (IRA) gives people based in the United States a way to build tax-deferred savings for retirement. An IRA is an account, not an investment. You can put just about whatever investments you want into your IRA — stocks, CDs, mutual funds, cash and bonds — anything except options and other derivatives. There are two types of IRA, both accepted by OurCrowd – Traditional IRA and Roth IRA.
In a traditional IRA contributions are tax-deductible, with all transactions and earnings within the IRA having no tax impact, and withdrawals at retirement are taxed as income (except for those portions of the withdrawal corresponding to contributions that were not deducted). Depending upon the nature of the contribution, a traditional IRA may be referred to as a “deductible IRA” or a “non-deductible IRA.” It was introduced with the Employee Retirement Income Security Act of 1974 (ERISA) and made popular with the Economic Recovery Tax Act of 1981.
In a Roth IRA, contributions are made with after-tax assets, all transactions within the IRA have no tax impact, and withdrawals are usually tax-free. Named for Senator William V. Roth, Jr., the Roth IRA was introduced as part of the Taxpayer Relief Act of 1997.
Why is this good for investors?
Investors with financial security and a sound retirement plan now have the ability to use tax-advantaged IRA accounts for alternative investments, giving you further opportunities to diversify your IRA portfolios. You can now invest in OurCrowd’s portfolio companies, funds, or Portfolio Reserve, straight from your IRA, giving you beneficial tax advantages.
Here is an article written by the Wall Street Journal’s tax strategy reporter Laura Saunders on the topic. Forbes writes that disillusioned with returns on conventional investments, IRA owners are increasingly turning to alternative forms of investment, such as OurCrowd and other VCs, to maximize earnings on retirement.
What do I do now?
Of course, your financial planner and tax advisor should be consulted prior to any investment.
While we don’t recommend any particular IRA, we have worked with Millennium Trust Company to create a seamless process that allows our investors to easily utilize any type of IRA account (Traditional, SEP, Simple, Roth, etc.) to invest through OurCrowd.
With over $18 billion assets under custody, 15 years of experience, and expanded $2,500,000 FDIC insurance coverage, Millennium Trust manages over 400,000 accounts and we have worked with them to assure you will have a positive experience.
If you’re interested in moving forward, contact our Investor Relations team for more information.