Beginners Guide To Self-Directed IRA’s
You probably know all about the most popular retirement savings accounts: a 401(k) offered by your employer and IRAs (either traditional or Roth) that you and possibly your employer may contribute to. IRAs can at times have certain tax advantages over 401(k)s, and often give you greater control over your investments, however many employee-sponsored plans may let Uncle Sam or unscrupulous financial planners have a say in where your money is invested.
Even traditional and Roth IRAs place substantial limits on how you can invest in your future; though they can be a better option than many other retirement investment vehicles, they don't always allow you the freedom you deserve.
Anyone who truly wants to take control of their retirement should consider a self-directed IRA. They've been around for decades, but few people know about them because the freedom of investment options they offer doesn't give commission-based retirement planners much of an incentive to educate clients about this product.
You can take an in-depth look at self-directed IRAs here
, or keep reading for a basic overview and to see if a self-directed IRA might be right for you.
What Is A Self-Directed IRA?
A self-directed IRA allows you to make your own investment decisions. This is the retirement vehicle choice that will interest you if:
You like being in the driver’s seat when it comes to how to invest your funds
You see the financial benefit of investing in other types of commodities beyond stocks and bonds
You’re not afraid of diversifying your financial risk
If you’re not afraid of rolling up your sleeves to take a more proactive stance over your retirement funds, and you have an open mind about the types of investments that are at your disposal to invest in, then perhaps a self-directed investment fund is right for you.
How Does Self-Directed IRA Management Differ From Traditional IRA Management?
The most commonly asked question is how does self-directed IRA (SDIRA) management differ from traditional IRA management. The fact is, you can invest in the same financial products within a SDIRA that you can with the traditional IRA. Both types of retirement accounts are held at a financial institution.
However, the traditional account is managed by a financial officer, and the confines of the traditional IRA only allow you to invest in financial products such as stocks, bonds, and mutual funds. If you’re an investor who would like to explore other investing options, then investing in a traditional IRA could leave you feeling confined.
On the other hand, the investing options at your disposal within a SDIRA create a plethora of retirement income streams for you to take advantage of.
What Are The Specific Advantages Of Self-Directed IRA Management?
There are many investment choices that become available to you once you decide to create a SDIRA fund. Common investment vehicles include:
Tangible Asset Deeds
Tax Lien Certificates
Accounts Receivable Financing
Contracts of Sale
Foreign Sales Corporation Stock
Improved or Unimproved Land (Leveraged or Un-Leveraged)
The best part is, you can use your current industry education (or expertise) to select the investments you’re interested in. You don’t have to blindly invest in a financial product without understanding its industry or its probability factor to generate revenue.
You won’t be confined into investing in financial products you don’t believe in, or you feel won’t offer you the best returns on your investments. Instead, you’ll gain far more control over your investment portfolio within a SDIRA as you see fit.
Are Self-Directed IRA Vehicles Worth Considering?
A SDIRA is definitely worth considering if you’re the type of new or experienced investor who keeps their finger on the pulse of news in various industries. If you’re this type of investor, then you’ve done your homework, and you’re probably eager to take advantage of revenue generation in all sorts of exciting new industries that were previously non-existent, even as recently as 10 years ago.
Or, perhaps you’re the type of investor who enjoys the idea of investing in solid, long-standing institutions such as real estate, livestock, or precious metals. Perhaps these are the types of investment vehicles that were previously out of your reach but now they’re an investment option that you’d like to take advantage of.
Not only will a SDIRA allow you to finally take advantage of revenue generation in the products you’ve kept your eye on, but a SDIRA will also allow you to decide how aggressively or conservatively you’ll invest and control your retirement funds.
Special Considerations For Self-Directed IRAs
While there are plenty of advantages you could realize by investing in a SDIRA, there are special considerations you’ll need to keep in mind.
For example, the IRS forbids investments in products such as works of art, certain types of metals, life insurance products, antiques, or alcoholic beverages. There are also IRS statutes that forbid you from making harmful financial decisions that involve self-dealing or conflicts of interests.
If you think you're better at handling your money and planning for your retirement than a financial advisor, then a self-directed IRA could be an important part of your portfolio. SD-IRAs give you the freedom and control to plan for retirement your way, and give you the most opportunities to create your own portfolio without limiting the specific retirement instruments you select.
Don't restrict your retirement potential. Visit Equity University today
and get started on your own self-directed path to retirement enlightenment.