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How to Set Up a Self-Directed Traditional or Roth IRA

Open a Self-Directed Traditional IRA or Roth IRA in 3 Easy Steps

Have you discovered the wealth-building power of the self-directed retirement account and want to get started? Here’s what you need to know to set up a self-directed Traditional IRA or Roth IRA with Equity Trust.

Step 1: Open Your Self-Directed IRA

Set up your Traditional or Roth account online in minutes.

Open your self-directed account online with myEQUITY. It takes just a few minutes, and you’ll be guided through the steps to provide your personal information and method of funding for your account. After a final review of your application and signing using eSignature, your application will be submitted.

What’s next?

Your account will typically be opened within 3 business days. Delays may occur if there are any corrections needed from you in order to complete the account setup process.

Step 2: Fund Your Self-Directed Account

There are three main ways to fund your Traditional or Roth self-directed IRA:

  1. Rollover
  2. Transfer
  3. Out-of-pocket contribution

These options are not mutually exclusive.  It is possible to fund your IRA by one, two, or all three methods.  Additionally, it may be possible to fund a Roth IRA through a Roth Conversion.

See below for more details about each funding option.

Step 3: Start Investing

Once your self-directed account is open and funded, you are ready to invest.

You direct all investments for your account with the freedom and flexibility to diversify your portfolio with both alternative and traditional assets.

No investment? Explore opportunities in Investment District, our online marketplace.

Equity Trust will process the investment, per your direction, on behalf of your account.

You can process your investment direction online using the intuitive wizards or Transaction Launcher feature on myEQUITY to submit your request. The Transaction Tracker and dashboard provide access to monitor transactions around-the-clock from any device.

Open Your Account Online

Account Funding Options

Rollover, Transfer, Out of Pocket Contribution, or Roth Conversion

Rollover

If you have a qualified plan from a previous employer, such as a 401(k), 403(b), 457, Thrift Savings Plan or other qualified plan, or if you have an existing IRA, you can fund your account by rollover.

A rollover involves moving funds from a qualified plan or IRA to a different IRA and typically occurs when the account owner receives a personal distribution of funds and then deposits the funds into their new account.

Important Note: You are limited to one rollover within a 12-month period. This limitation does not apply to direct transfers from one IRA trustee directly to another. You can review more information here.

Transfer

If you have an existing Traditional IRA or Roth IRA at another financial institution, you can request a transfer to your newly established self-directed IRA at Equity Trust.

During a transfer, funds and/or assets from your existing IRA at your current financial institution are moved directly to a compatible account at Equity Trust (Traditional IRA to Traditional IRA or Roth IRA to Roth IRA). Unlike out-of-pocket contributions, there are no limits on the amount you can transfer.

Transfers can be initiated online using the myEQUITY Transfer Wizard or by completing an Account Transfer form. You can request a full or partial transfer of an account. A transfer can move assets from the existing account in-kind, and/or you may request a transfer of cash.

Out-of-Pocket Contribution

Assuming you qualify, you can contribute to your self-directed IRA from your personal checking or savings account, or with a credit card payment.

This funding method is subject to annual maximum contribution limits set by the IRS each year. See the current contribution limits.

Roth Conversion

Roth IRAs may be funded through a Roth Conversion, which involves converting funds and/or assets from a tax-deferred account (such as a Traditional IRA, SEP IRA, SIMPLE IRA, 401(k) or other tax-deferred plan) to a Roth IRA.

A Roth Conversion is a taxable event: When you convert from a tax-deferred account to an after-tax Roth IRA, the amount of the conversion is added to your ordinary income in the year of the conversion and subject to ordinary income tax. It’s important to consult with a CPA, tax attorney, or other financial professional when considering a Roth Conversion.

Note: This is possible even for individuals who exceed the income limits to be eligible to contribute to a Roth IRA out of pocket.



Rollover

Rollover

If you have a qualified plan from a previous employer, such as a 401(k), 403(b), 457, Thrift Savings Plan or other qualified plan, or if you have an existing IRA, you can fund your account by rollover.

A rollover involves moving funds from a qualified plan or IRA to a different IRA and typically occurs when the account owner receives a personal distribution of funds and then deposits the funds into their new account.

Important Note: You are limited to one rollover within a 12-month period. This limitation does not apply to direct transfers from one IRA trustee directly to another. You can review more information here.

Transfer

Transfer

If you have an existing Traditional IRA or Roth IRA at another financial institution, you can request a transfer to your newly established self-directed IRA at Equity Trust.

During a transfer, funds and/or assets from your existing IRA at your current financial institution are moved directly to a compatible account at Equity Trust (Traditional IRA to Traditional IRA or Roth IRA to Roth IRA). Unlike out-of-pocket contributions, there are no limits on the amount you can transfer.

Transfers can be initiated online using the myEQUITY Transfer Wizard or by completing an Account Transfer form. You can request a full or partial transfer of an account. A transfer can move assets from the existing account in-kind, and/or you may request a transfer of cash.

Out-of-Pocket Contribution

Out-of-Pocket Contribution

Assuming you qualify, you can contribute to your self-directed IRA from your personal checking or savings account, or with a credit card payment.

This funding method is subject to annual maximum contribution limits set by the IRS each year. See the current contribution limits.

Roth Conversion

Roth Conversion

Roth IRAs may be funded through a Roth Conversion, which involves converting funds and/or assets from a tax-deferred account (such as a Traditional IRA, SEP IRA, SIMPLE IRA, 401(k) or other tax-deferred plan) to a Roth IRA.

A Roth Conversion is a taxable event: When you convert from a tax-deferred account to an after-tax Roth IRA, the amount of the conversion is added to your ordinary income in the year of the conversion and subject to ordinary income tax. It’s important to consult with a CPA, tax attorney, or other financial professional when considering a Roth Conversion.

Note: This is possible even for individuals who exceed the income limits to be eligible to contribute to a Roth IRA out of pocket.



Explore the Possible

100+ Investment Options You Didn’t Know Were Possible for Your IRA

Access your list of investment options, each with the potential to be held within an IRA or other tax-advantaged account.

  • Residential and commercial real estate
  • Notes, mortgages and private lending
  • Businesses and private entities
  • “Other” alternative investment options
  • Traditional asset classes
Access Your Checklist

Tax-Advantaged Self-Directed Accounts for Individuals

Traditional IRAs and Roth IRAs are options for those who want to self-direct their retirement account.

Traditional IRA

Allows you to make contributions with pre-tax money and may provide a tax deduction, while the investment earnings are tax-deferred until withdrawn from the account.

Advantages:

  • Contributions may be fully or partially tax deductible depending on your circumstances
  • Taxes on investment earnings are deferred

Individuals age 59½ are eligible to start taking withdrawals, but at age 72, required minimum distributions must begin.

Learn More

Roth IRA

Allows you to make contributions with after-tax dollars (not eligible for tax deduction). The Roth IRA is designed to allow investment earnings to grow tax-free and provides the opportunity for tax-free withdrawals in retirement. Earnings and qualified distributions are tax-free after age 59½.

Advantages:

  • Qualified withdrawals are tax-free
  • Investments can compound tax-free
  • No required withdrawals at any age

U.S citizens, regardless of age, can open a Roth IRA, assuming their individual Modified Adjusted Gross Income (MAGI) is within allowable limits.

Learn More
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Let’s talk about your financial future.

Schedule a one-on-one session with an expert alternative investment counselor. We’re here to answer any questions, help guide you through the process, and provide more detailed information and education specific to your journey.

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