5 Benefits of a Self-Directed IRA (SDIRA)

sdira accounts

When planning for retirement, most consumers assume that traditional options, such as 401(k)s, IRAs, or employer-sponsored plans, which typically include mutual funds and stocks, are the only available options. However, many people long to have more control over their retirement and are unaware of the other options available. Enter the Self-Directed IRA (SDIRA) — a powerful yet often overlooked retirement account that puts the customer in control of their investments. Understanding the benefits of using a self-directed IRA will help an investor optimize their retirement planning.

Benefits of Self-Directed IRAs:

Expanded Investment Options

Unlike traditional IRAs, SDIRAs allow account holders to invest in a variety of investment options, including:

Real estate (residential, commercial, raw land)
Precious metals (gold, silver, etc.)
Tax Liens
Private Equity/Companies

Having investment control opens up opportunities for higher returns, better diversification, and investment in areas where investors have personal knowledge and expertise.

Diversification Outside of the Stock Market

Relying solely on the stock market can expose your retirement to volatility amidst economic downturns. With a SDIRA, investors can hedge against inflation and market risk by investing in hard assets or alternative markets. For instance, real estate or private lending can provide stable, passive income streams even when the stock market is down.

Tax Advantages

Just like traditional and Roth IRAs, SDIRAs offer tax-deferred growth depending on the account type:

Traditional SDIRA: Contributions are tax-deductible, and growth is tax-deferred until withdrawal.
Roth SDIRA: Account holders make contributions after tax, but qualified withdrawals are tax-free.

Greater Control and Flexibility

With an SDIRA, the account holder has complete control over their investment. They decide which assets to invest in and when to make a move, which is especially attractive to experienced investors or entrepreneurs who want more input in the use of their retirement funds.

Potential for Higher Returns

By investing in assets, the account holder will typically invest in options that they have a strong understanding of and feel confident will be a beneficial investment. One commonly chosen investment is real estate used as rental properties. Building a portfolio centered around unique investments may generate higher returns than a traditional stock-based portfolio. While these investments may carry higher risk, they also offer the potential for substantial rewards.

Before Opening a SDIRA

While SDIRAs offer numerous advantages, they also include additional responsibilities for the investor. For example, account holders must avoid prohibited transactions (such as self-dealing or using SDIRA assets for personal benefit) and follow IRS rules carefully. It’s critical to work with a qualified custodian, such as SouthStar Bank, and consult with financial or legal professionals who have experience working with SDIRAs.

In Conclusion

A Self-Directed IRA isn’t for everyone, but for investors looking to diversify and take control of their retirement planning, it could be a top account option. Whether you’re a real estate investor or simply looking to escape market dependency, an SDIRA gives you the flexibility to build a retirement portfolio on your terms.

Interested in starting your SDIRA journey? SouthStar Bank is ready to help you with the next steps. Contact our dedicated team of IRA experts to get started!

Secure Documents: What to Keep and How Long

Person sorting through documents at table, closeup

Over the years, the number of essential documents in your possession often stacks up. The accumulation of documents can make it increasingly challenging to determine which documents should be kept secure and for how long. Outlined below is a list of several documents that are vital to keep safe and secure, along with a rough timeline for their retention.

Forever Documents:

Birth Certificates
Marriage and Divorce Records
Social Security Cards
Loan Payoff Statements
Retirement/Pension Records
Estate Documents
Military Service Records
Death Certificates
Loan Documents
- Loan Statements and Documents should be kept until the loan is paid off, at which point you should keep the Loan Payoff Statement
Vehicle Titles
- Titles should be held for as long as you own the vehicle
Home Improvement Purchase Receipts
- Proof of all home improvements should be kept until you sell the home
Investment Statements

Three to Seven Years:

Tax Records
Medical Bills

One Year:

Credit Card Statements

While keeping physical and/or original copies of these documents is beneficial, it is also wise to scan important documents and store them digitally on a secure device. For monthly, quarterly, or annual statements, options are often made available for electronic statement delivery. This can expedite the record-keeping process and prevent potential fraud in the event that one of your statements is lost or stolen. Always remember to keep your accounts updated in the event you change your email, phone number, home address, etc., to ensure no documents are delivered to the wrong place.

Source: The Washington Post

Welcome Hilary Hernandez

Hilary Hernandez, Assistant Vice President & Branch Manager | SouthStar Bank Gonzales

SSB 639 StaffHighlight FB HilaryHernandez Welcome v1

Hilary Hernandez has joined the SouthStar Bank Gonzales team as an Assistant Vice President and Branch Manager. Hilary is well-versed in banking, with nearly two decades of experience in the industry, including a year spent previously with SouthStar Bank. In her role as Branch Manager, Hilary is excited to bring her passion for customer service alongside her hunger to continue learning new things. She looks forward to instituting her inclusive style of leadership and helping her team learn and develop.

Outside of work, Hilary enjoys embarking on beach vacations, shopping, hosting backyard BBQs, and having movie nights with her kiddos! One of her crowning achievements is her career in banking, as well as her journey and development throughout her 18 years in the industry.

Welcome to the team, Hilary!

5 Benefits of a Health Savings Account (HSA)

Health Savings Account image, building blocks of health savings

When it comes to managing healthcare expenses and planning for the future, a Health Savings Account (HSA) offers more than just a way to pay for doctor visits. SouthStar Bank is proud to offer HSAs to our customers, as the benefits of a health savings account include several practical and financial advantages that can have a big impact on your overall financial wellness. If you’re enrolled in a high-deductible health plan, here are five major benefits of opening and contributing to an HSA.

Triple Tax Advantage

One of the most compelling reasons to contribute to an HSA is the triple tax benefit. First, contributions are tax-deductible (or pre-tax if made through payroll), which lowers your taxable income. Second, any interest or investment gains in the account grow tax-free. Third, withdrawals are tax-free when used for qualified medical expenses.

This rare combination makes HSAs one of the most tax-efficient savings tools available—more advantageous than even traditional retirement accounts like IRAs or 401(k)s when it comes to medical spending.

Funds Roll Over Year After Year

An HSA allows your unused funds to roll over indefinitely. You don’t have to worry about spending the money by the end of the year. Instead, you can let your balance grow year after year, building a cushion for future healthcare costs.

This feature makes HSAs ideal not only for short-term medical expenses but also for long-term financial planning.

You Own the Account

An HSA is yours—even if you change jobs, switch health plans, or retire. It’s not tied to your employer, which means you keep the account and the funds no matter where life takes you. That’s different from some other workplace benefits that may be lost or changed when you leave a job.

This portability gives you greater control and peace of mind, knowing your healthcare savings remain intact and accessible.

Use Funds for a Wide Range of Expenses

You can use HSA funds to pay for a long list of qualified medical expenses. This includes doctor visits, prescriptions, dental and vision care, and even certain over-the-counter medications. You can also use it to cover expenses for your spouse and dependents—even if they’re not on your health plan.

After age 65, HSA account holders can use funds for any expense—medical or not—without penalty. You’ll just pay regular income tax on non-medical withdrawals, similar to a traditional IRA or 401(k).

Flexible Contribution Options

HSAs are simple to fund and manage. You can contribute through payroll deductions (if offered by your employer), make direct deposits from your bank account, or even contribute by check. You can make contributions at any time during the year, up to the IRS annual limits. For 2025, individuals can contribute up to $4,300 and families up to $8,550.

This flexibility helps you tailor your contributions to fit your budget and financial goals, whether you’re planning for upcoming medical expenses or saving for the future.

Health Savings Accounts are more than just a way to pay for your next doctor’s visit, they’re a versatile, tax-advantaged financial tool that can help you plan for healthcare costs now and in the future. If you qualify, take advantage of the many benefits of a Health Savings Account could be one of the smartest moves you make for your financial and physical well-being.

Looking to open your HSA today? Contact your local SouthStar Bank branch and our experts will be happy to assist you!

Operations Update 6.7.25

IMPORTANT OPERATIONS NOTICE

To enhance our systems and better serve you, we will be upgrading our data center over the weekend. This necessary conversion will improve long-term reliability, security, and performance.

During the transition, our Online Banking will be in inquiry-only mode with transactions history only appearing for transactions prior to Friday, June 6th at 5:00pm. During this time, debit card limits may also be impacted. Zelle®, money transfers, and mobile deposits—will not be accessible. If you currently use your debit card for person-to-person payments apps those funds will be unavailable during this period.

The systems will be restored on Monday, June 9, 2025. We encourage you to plan ahead and appreciate your understanding as we work to bring you an even better banking experience.

IRA Withdrawal Rules: What to Know Before You Retire

Finance, documents and senior couple on sofa with bills, paperwork and insurance checklist in home, life or asset management, Elderly black people on couch with financial, retirement or mortgage debt

Planning for retirement involves more than just saving money; it’s also about understanding how and when to access your retirement funds. SouthStar Bank proudly offers Individual Retirement Accounts (IRAs) to support your retirement goals. These accounts provide unique benefits targeted at putting you in a great position to retire when your career comes to a close. While these accounts offer several advantages, your IRA will also have withdrawal restrictions. Understanding IRA withdrawal rules and regulations is essential for avoiding penalties and maximizing the benefits of your IRA.

Before diving into the IRA withdrawal rules, it’s essential to review the two primary types of IRAs: Traditional IRAs and Roth IRAs. The rules for withdrawing funds differ depending on which one you have.

Traditional IRA: Contributions are typically tax-deductible when you make them, but withdrawals are taxed as ordinary income.
Roth IRA: Contributions are made with after-tax dollars, so you won’t pay taxes on withdrawals if certain conditions are met.

A crucial milestone for both Traditional and Roth IRAs is reaching the age of 59½. Once you reach this age, you can withdraw from your IRA without facing the IRS’s 10% early withdrawal penalty. However, some specific nuances depend on the type of IRA.

Traditional IRA Withdrawal Rules

As mentioned previously, contributions made to Traditional IRAs are tax-deductible. This means that withdrawals made after the age of 59½ won’t be penalized but will be subject to income tax unless you’ve made non-deductible contributions to your account. The IRS mandates that you start taking Required Minimum Distributions (RMDs) from your Traditional IRA at age 73.

Roth IRA Withdrawal Rules

For Roth IRAs, the rules are a bit more flexible. You can withdraw your contributions at any time (after the age of 59½), tax and penalty-free, since those contributions were made with after-tax dollars. However, to withdraw earnings without taxes or penalties, you must meet two conditions:

You must be at least 59½ years old.
Your Roth IRA must have been open for at least five years.

If you withdraw earnings before meeting these requirements, they could be subject to taxes and a 10% penalty.

Required Minimum Distributions (RMDs)

As mentioned, Traditional IRAs require RMDs starting at age 73. These are the minimum amounts you must withdraw each year, which are based on your account balance and life expectancy. Roth IRAs, however, do not require RMDs during the account holder’s lifetime, making them an attractive option for those who want to leave their IRA funds to heirs.

The 10% Early Withdrawal Penalty

If you need to access your IRA funds before age 59½, you’ll generally face a 10% early withdrawal penalty. However, there are several exceptions to this rule. Some of the most common exceptions for both Traditional and Roth IRAs include:

Disability
First-time home purchase (up to $10,000)
Qualified education expenses
Medical expenses exceeding 7.5% of your adjusted gross income
Health insurance premiums during unemployment

It’s essential to check whether your specific situation qualifies for an exception before making an early withdrawal.

Planning Ahead

Understanding the rules surrounding IRA withdrawals is essential for making informed decisions about your retirement. While the 59½ and 73 age milestones are key, planning for taxes and RMDs ahead of time can help you avoid unnecessary penalties.

Have more questions regarding IRA withdrawals or looking to open an IRA to kickstart your retirement? Contact your local SouthStar Bank branch or reach out to our IRA experts at IRA@southstarbank.com.

5 Benefits of a Self-Directed IRA (SDIRA)

Benefits of Self-Directed IRAs:

Expanded Investment Options

Diversification Outside of the Stock Market

Tax Advantages

Greater Control and Flexibility

Potential for Higher Returns

Before Opening a SDIRA

In Conclusion

Secure Documents: What to Keep and How Long

Welcome Hilary Hernandez

5 Benefits of a Health Savings Account (HSA)

Triple Tax Advantage

Funds Roll Over Year After Year

You Own the Account

Use Funds for a Wide Range of Expenses

Flexible Contribution Options

Operations Update 6.7.25

IMPORTANT OPERATIONS NOTICE

IRA Withdrawal Rules: What to Know Before You Retire

Recent Posts

Recent Posts

Archives