Free Consultation
Open an Account
nav-icon-search

    A Guide to
    Self-Directed IRAs

    Do more than check a box. Directly find, pick, buy, and sell alternative assets with your IRA.

    Free Guide Download Button

     

     

    Self-Directed IRA (SDIRA) vs  Managed IRA

    With the self-managed IRA or regular IRA you find at most financial institutions, you simply check a box to indicate the mix of stocks and mutual funds you want. You are limited to traditional investments. With self-directed IRAs, you get to find, buy, and sell the alternative investments in your retirement account.

    You can also invest in alternative assets that you can't invest in with a regular IRA. This is especially beneficial if you already have expertise in a certain types of investments or market, such as real estate.

    Open an Account

    Reach Your Retirement Goals with a Self-Directed IRA

    SDIRAs have the same tax benefits as IRAs offered by banks or brokerage firms with the added benefits of being able to invest in more asset types and directly pick, buy, and sell the assets held in your retirement account.

    Self-directed IRAs offer three key benefits: diversification, investment control, and the same tax benefits as IRAs managed by a broker-dealer. Beyond stocks, bonds, and mutual funds, you can invest in non-traditional assets like real estate and private equity that give you added protection from a turbulent stock market— the investment decision is yours.

    You also decide whether you want IRAR to do the recordkeeping or if you want full bookkeeping control of your account via an LLC. Often referred to as checkbook control, establishing a self directed IRA LLC with IRA funds allows your LLC to make asset purchases. SDIRAs also allow you to employ other strategies, like taking out a non-recourse loan with your IRA or partnering with others to purchase real estate.
    Guide

    What You Need To Know

    How Self-Directed IRAs Work

    With any self-directed IRA, the IRS requires you to have a custodian for protection and oversight. Custodians like IRAR are regulated by state and federal law and are regularly audited. Make sure you know the difference between an IRA custodian and an IRA administrator.

    After you choose a self directed IRA custodian, you'll want to determine which IRA account is best for your goals and open an account. You can choose from Roth IRA, Traditional IRA, or if you have a small business, a SEP IRA or SIMPLE IRA might be best.

    You can fund your SDIRA with an existing retirement account. This can be an IRA or old 401(k), or by making scheduled contributions. If you're funding it with an existing retirement account, there are two ways to do this: a rollover or a transfer . Be sure to check IRA compatibility. Given the different tax benefits of different types of IRAs, you want to know the type of account you can move funds to.

    Once your account is funded, simply tell your SDIRA custodian what alternative asset you want to purchase. When it's time to take distributions (age 59 1/2) or required minimum distributions (age 72), you can liquidate the assets or you can take in-kind distributions.

    Guide

    How to Transfer Retirement Savings to a Self-Directed IRA

    How Do I Set up a Self-Directed IRA?

    First, conduct a comparison on Custodians or trust companies . Third-party providers, like administrators and promoters, are generally not custodians. Instead, they work with a trust company to conduct business. It's important to know the difference.

    Once you choose a custodian, opening a self-directed IRA is simple and you can do it yourself online. You can complete a new account application and fund your account with an existing IRA or old 401(k), or you can make regularly scheduled contributions, not to exceed the contribution limits for the year.

    Transferring funds from an existing IRA to your self-directed IRA is an easy process and it is not a taxable event. You can start an IRA transfer by completing a Transfer Form and submitting it with your new account application. IRAR guides you through this process.

    Once your account is funded, you can tell your IRA custodian what to invest in and your custodian will make the purchase.

    The investments are titled in the name of the self-directed IRA. All the expenses for the investment are paid from the IRA and all of the income is put back in the IRA. The same is true if you sell the investment- the profits are put back into the IRA.
    Resource

    Opening a Self-Directed IRA is Easy

    Unlock the Potential for Higher ROI— Alternative Investments

    Why leave your money at the mercy of the market? With a self-directed IRA, you can invest in specific assets such as a private company. But you can also invest in other non-traditional assets, like real estate or an LLC, that have the potential for a higher rate of return.

    These alternative investments are the major benefit of opening a self-directed IRA. By investing in these assets, you can further diversify your portfolio, capitalize on any industry knowledge (such as real estate), and protect your savings from a volatile stock market or unpredictable changes in the economy.

    Real estate professionals, for example, can use their expertise to invest in residential, commercial real estate, and other types of properties. With their knowledge of the industry, they can invest in properties that stand to grow faster than the market.
    Resources

    Investment Options

    Self-Directed IRA Investment Strategies

    Your retirement goals and financial situation will influence your SDIRA strategy. Different account types offer different tax benefits. For example, a Roth IRA (tax free) may fit into your retirement strategy if you believe you'll be in a higher tax bracket when you're retired, whereas a Traditional IRA (tax deferred) may make more sense if you believe you'll be in a lower tax bracket.

    You have many investment options as well strategies for your retirement savings. While IRAR can do your recordkeeping, you can gain full bookkeeping control of your account by establishing an LLC with IRA funds. Often called checkbook control, this type of SDIRA allows your LLC to make asset purchases.

    Other strategies include taking out a non-recourse loan with your IRA to invest in real estate, direct purchase of a property, or partnering with others (or their retirement funds) to make a bigger real estate investment.

    These strategies can be mixed and matched in many ways. You aren't limited to just one of them. You can combine these to maximize your investment potential.

    Article

    5 Self-Directed IRA Investing Strategies

    Self-Directed IRA Rules 

    Keep your retirement on the right side of IRS regulations. With this tax-enhanced environment comes added responsibility. There are three key rules to keep in mind:

    1. You cannot engage in a transaction with a disqualified person
    2. You cannot use the IRA to take personal benefit
    3. You cannot invest in disallowed investments (life insurance and collectibles)

    As the account owner you are responsible for making all the investment decisions for your self-directed IRA. This means that you are also responsible for making sure you do not break the rules or engage in a prohibited transaction.

    You are responsible for conducting due diligence on the investment; finding, vetting, and keeping track of investment performance- and for updating the fair market value ( FMV ) of your investments or assets annually. Your are also responsible for getting investment advice from a qualified financial or tax professional.

    With self-directed IRAs you get a lot of investment freedom, but you do have some responsibility.

    Resource

    Self-Directed IRA Rules and Examples

    Choose the Self-Directed IRA Custodian Who Looks Out for You

    Not all self-directed IRA custodians provide the same services. Specializing in real estate and private equity transactions in self-directed IRAs, our employees each have nearly a decade of industry experience and a passion for educating clients. That means we share what we know with you as soon as we know it, so you can always make the best investment decisions possible.

    Meet Our Experts

    Save over 50%
    Save Over 50% on Fees
    Increase wealth without increasing fees. Our annual fee is per asset and not based on the value of your account.
    SDIRA Experts
    SDIRA Experts
    Power your success with easy access to up-to-date educational tools and services from Certified IRA Services Professionals.
    IRAR Team
    Fast, Personalized Service
    Servicing times can make or break an investment deal. Get immediate help from an expert anytime you call, email, or visit.

    Self-Directed IRA FAQs

    What is a self-directed IRA? 

    A Self-directed IRA is a retirement account that you control. With a self-directed IRA you do more than check a box. You directly find, pick, buy, and sell the assets held in your IRA.

    How do I set up a self-directed IRA? 

    You can open a self-directed IRA yourself. Open a new account online, move savings from another IRA to the account, or make a contribution to the new account. 

    Can a self-directed IRA invest in a business? 

    Yes. A self-directed IRA can invest in a business  where you or a disqualified person do not own 50% or more of the business.

    What are the fees for a self-directed IRA? 

    The fees for self-directed IRAs vary depending on the custodian. Usually there is a fee to set up the IRA and a fee to maintain the IRA. You should compare custodians fees before opening an account.

    Self-Directed IRAs: What You Need To Know To Get Started

    Download the basics before getting started with a Self-Directed IRA.

    Watch Your IRA Investments Grow, Not Your Annual Fees

    Open an AccountFree Consultation

    Get the Latest Investment Strategies from Our Experts

    IRAR Trust Company
    6825 La Jolla Blvd
    La Jolla, California 92037

     

    Phone: 888-322-6534 (toll-free)

    Phone: 858-459-1212

    Fax: 858-459-6565


    Contact Us

    Free Consultation

    Solutions

    ACCOUNT TYPES

    INVESTMENT OPTIONS

    INDIVIDUAL INVESTORS

    REALTORS

    FINANCIAL PROFESSIONALS

    INVESTMENT SPONSORS

     

    Knowledge Center

    Getting Started with Self-Directed IRAs

    Guides

    Blog

    FAQs

    SDIRA Professionals Network

    About IRAR

    Who We Are

    Client Testimonials

    Press Releases

    Contact Us

    Updates & Support

    Client Center

    Forms

    Pay Fees

    Contact Us

    Sign In

    © 2020 IRAR Trust Company|Terms of Use|Privacy Policy IRAR Trust - BBB A+ Rating