What is a Self-Directed IRA?

A self-directed IRA is an individual retirement account which is usually provided by financial institutions as an alternative investment for retirement savings. This account allows individuals to put aside some money for retirements which they can use in the future. It encourages savings and offers a number of benefits to the account holders. The account is referred to as self-directed since the owner of the account has full control over both selecting and directing their individual retirement account investment.

A self-directed IRA will involve a custodian who holds money in the account and will make investments in things like private placements, real estate, or other things depending on the owner’s directives. To begin utilizing a self-directed IRA, you must understand all the rules and regulations governing the investments as well as the tax implications. This is because the self-directed accounts put most of the responsibility on you as the owner.

The benefits of self-directed IRAs

There are many benefits of self-directed IRAs. One can access a wide range of alternative investments which are not actually offered by the brokerage firms and the banks. One also gets a chance to invest in what they know and understand well and they can directly manage their investments. By owning different commodities, the account owners can protect their wealth even when there is economic fluctuation. In addition, the portfolios are truly diversified to protect the owners against the possible market volatility, as well as harsh inflation rates. One will also get an opportunity to partner with friends and family while making more and more investments.

Self-directed IRAs are gaining popularity recently with a lot of investors expanding beyond stocks and bonds. Opening a self-directed IRA is simple and easy. All one needs to do is to determine the account they want, choose a fee option, fund the account, provide a copy of the national ID, and submit the new account kit and get started.

 

Disclaimer: The Company introduces general information and education concepts about self-directed retirement accounts (such as 401(k) and IRA accounts). Like any investment, there is risk in using retirement funds for investing in real estate assets. It is possible to lose a portion or all of an investment in real estate – including those purchased with retirement funds. Please review IRS Publication 3125 regarding the use of retirement funds for alternative investments. The document can be found at: http://www.irs.gov/pub/irs-pdf/p3125.pdf. Every individual is different, with unique circumstances. We do not offer tax, accounting, financial or legal advice. Prior to acting upon this information, you may consult your own accounting, legal and financial advisors to evaluate the risks, consequences and suitability of that transaction. The Company is not a retirement account custodian, trustee, or securities dealer.