Socially Responsible IRAs

IRAs, as they’re commonly referred to, are individual retirement accounts that individuals set up in addition to our in place of 401(k)s and other employer-backed retirement accounts. Contrary to popular belief, an IRA is not an investment itself.  It is a type of account that individuals can add money to over time and use to purchase investments.

At Invested Interests, we’ve put together a new IRA option – one that allows individuals to invest in companies at the forefront of sustainable and socially responsible business practices.  At the same time, we’ve opened these accounts open to all with a minimal investment, not just the wealthiest investors like has been historically done.

Now, socially responsible millennials and all investors focused on using their investments to fund social change have an opportunity to do so.  The Socially Responsible IRA from Invested Interests uses advanced screening technology to find companies that are taking the lead in investing in social causes including the environment, human rights, diversity, and peace.

The purpose of our socially responsible retirement accounts is long-term accountability and growth.  By choosing companies that are thinking in the long term and focusing on the long-term growth of your individual portfolios, we’re focusing again on our two main components of social investing: financial return and promoting positive change.

socially responsible investment iras

Benefits of an IRA

    1. IRAs allow individuals to contribute up to $5,500 per year. This is on top of what you may already put away in a 401(k) or another employer plan. If you’re looking for non-traditional investment options, don’t worry, we have those too.
    2. If you’re over 50, you can save even more. Current tax law allows individuals over 50 to contribute an extra $1,000 per year to “catch-up” on retirement funds.
    3. The investments in your IRA grow tax-deferred. In simple terms, this means that you owe nothing on any investment gains as long as the money remains in the investment account.

Types of IRAs

There are three main types of IRAs.  Others are available as well, but the majority of investments are interested in these three typical accounts.

    1. Traditional IRA: A traditional IRA may be the best choice if you believe your current tax rate is higher now than what it’ll be in retirement. The money you contribute to your traditional IRA may be deductible from your taxes for the current year, which allows for a tax break now.
    2. Roth IRA: Unlike a traditional IRA, a Roth is generally chosen if you believe your tax rate may be higher in retirement (or when you choose to pull funds from your account). The benefit then is that your withdrawals are not taxed at all. So what you have in the account, is what you can utilize in retirement (without worrying about taxes).
    3. SEP IRA: The less known of the three, the SEP IRA stands for a simplified employee pension. Contribution limits are higher than those allowed in other types of accounts – either $55,000 (2018) or up to 25% of employee compensation. It’s generally used by small business owners who want to avoid operating costs of conventional plans, and SEPs allow sole proprietors to open an account for themselves.

As with each of the three plans, every situation is different and requires its own analysis to determine which is best for each individual. Questions as to which socially responsible IRA option is best for you? Give us a shout!

How to Open an IRA

Opening an IRA is pretty simple: fill out the form here to learn more. Some basic paperwork needs to be filled out, and then you just need to choose how to fund the account. This can be done via a check, bank transfer, or even rolling over a 401(k) from a previous employer.

Questions about our four socially responsible investment portfolios or types or socially responsible IRAs?  Ready to get started with no minimum investment?  Request a FREE impact investment consultation, and we’ll be in touch!

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