The self-directed IRA is a great place to start when you’re thinking about making decisions for your financial future. If you have already decided that you want to go the route of an SDIRA, that is a wonderful decision that will open many doors for you. Still, what is all this talk about a truly self-directed IRA?
For starters, a truly self-directed IRA won’t limit your investments any more than the IRS would. In fact, when you participate in an SDIRA, you will need to choose a passive custodian. The passive custodian’s job is to help ensure that all administration and paperwork is secure and followed according to IRS rules and regulations.
More about the passive custodian
The passive custodian is there to dot your I’s and cross your T’s, but they are not there to give you any kind of legal, tax or investment advice. When you decide to participate in a self-directed account, you’ll use your expert knowledge and make your own decisions about where to put your retirement savings.
The added beauty of a passive custodian is that you never have to worry about a conflict of interest with your custodian. Every IRA must have a custodian or trustee, but not all IRAs have a passive custodian. Many times, a custodian or trustee will work both for you and the self-interest of the financial institution.
Also, try to find a passive custodian who won’t charge you five cents in transaction fees for additional investments in your retirement account. Instead, look for a company that offers an all-in annual fee, so you can invest and optimize your retirement funds as often as you like.
So what makes a truly self-directed retirement plan possible?
This type of retirement plan will place no restrictions on you other than those that will prevent the IRS from closing your account and incurring penalties. You are free to invest in the things that you feel comfortable making an investment in.
This means you can invest in mutual funds, stocks, bonds, or certificates of deposit, just like a conventional IRA, but you’re not limited to that. Do you know a lot about real estate? You can direct your IRA to all kinds of real estate options. Do you have experience with companies or franchises? Take your knowledge and apply it to your retirement funds.
The list goes on:
• Tenants in Common (TIC)
• Mortgages
• Structured Settlements
• Gold bullion
• Tax Links
• And much more…
Is this retirement plan for you?
That depends on whether or not you are comfortable making your own financial decisions. After the loss of $4 trillion to the financial world and more than $72 billion of funds transferred from traditional IRAs to other types of investments between 2007 and 2009, it’s obvious that more people feel confident that they have a say in their future. financial.
A truly self-directed IRA is for someone who wants to create lasting wealth on their own terms.