To invest in alternative assets such as real estate or private equity with your retirement savings, you need a self-directed IRA. The IRS states that this must be through a passive 3rd party. Many investors choose an custodian for the added protections this oversight brings.
However, there are many companies out there that hold assets in an individual retirement account not all of which are IRA custodians. It's important to differentiate between these types of companies, since they're not all regulated the same (if at all). Choose the right company- one that will help you meet your retirement goals.
A company must apply to become a self-directed IRA custodian. They must demonstrate certain requirements and meet certain legal and IRS regulations before approval. This is a complex process. The company must meet strict standards and provide a capital pledge, insurance to cover liabilities, a fidelity bond, and other stringent qualifications. When the company and its leaders have demonstrated they are capable to perform custodian duties as outlined by the law, then it receives a Charter and Certificate of Authority from the state in which it applied.
Trust companies are audited regularly and held to specific guidelines based on written policies and procedures. During these reviews, auditors do a thorough examination of the books, records, funds, and IRA investments held by the trust company. They want to make sure that everything is being done correctly. Auditors will specifically be looking for any prohibited transactions (transactions involving disqualified persons or asset-types), as this falls afoul of IRS regulations. Our charter (and all self-directed IRA custodian charters) specifically forbids these types of investments. For example, a self-directed IRA custodian cannot legally offer one of their clients any investment advice or investment opportunities. The investment option is yours as is conducting due diligence on the asset.
It is important to determine the type of company you want to work with, based on your investment choice. Are you looking for a one-stop shop? If so, perhaps a large trust company with many types of services would be ideal. But beware, don't get stuck with a company that is a jack of all trades, master of none. Here's what to look for when choosing a self directed IRA custodian for your investment options:
Overlooked fees can have a huge impact on IRA accounts. Retirement plan fees are the biggest drain on retirement funds, keeping your hard-saved money from growing like it should. Learn how custodians charge and compare to understand transaction fees and schedules. As your investments grow, you shouldn't have to pay more.
Clear communication is very important, especially when it comes to your retirement. If you have a time-sensitive question, you want to make sure you can get ahold of the staff- and when you do, they know what they're talking about.
Servicing times are very important for any investor. Timing can make or break an investment deal. You can end up paying late fees if your bills aren't paid on time. You want the custodian you chose to make things easier for you, not harder.
To learn about a trust company's customer service, servicing times, or communication style, pay attention to the signs. Did someone call you back in a timely manner? Did you get tossed around from one person to the next? Do they have expertise in your asset of choice? Ask how long it takes to process your transaction. Asking these types of questions can save you major headaches when trying to get the basics handled down the line.
Our annual account reviews include but are not limited to audits of: recordkeeping, safekeeping of assets, compliance with federal and state laws, IRS reporting, trust accounting, account correspondence, completing trust account tax returns, distributing account statements.
If you are an investor looking for specialized services and personalized service, IRAR Trust Company is the ideal custodian. We specialize in real estate and private equity transactions in self-directed IRAs. We bring years of knowledge, experience, and hands-on assistance as needed. We do not offer, endorse, or promote products or investment options, nor do we provide investment advice. Your IRA, your choice. Our team holds the Certified IRA Services Professional (CISP) designation. Our average employee has 10 years of experience in self-directed IRAs, uncommon in our niche industry. We're a seasoned and dedicated group. We have a passion for education. No matter the question, you know you're getting up-to-date information every time you call.
When you self-direct your retirement funds you are in charge of every investment decision. This is why it's so important for any investor to choose a custodian that is responsive.
IRAR's committed to answering the phone, because we know it's essential to have a team you can trust behind you. We'll be waiting in the wings, to help keep your self directed IRA investments on the right side of IRS regulations. Give us a call- you'll be glad you did. 888-322-6534.
What is a self-directed IRA Custodian?
A self-directed IRA custodian is a financial institution that holds your IRA's alternative investments for safekeeping. It is regulated, audited, and adheres to IRS rules and guidelines.
Are all self-directed IRA companies the same?
Not all self-directed IRA companies are the same. There are many companies that "hold" alternative investments in IRAs that are not regulated like custodians. It's important to know the difference between custodians, administrators, and promoters."
How do I find the best self-directed IRA custodian?
To find the best IRA custodian for your strategy, you must do a comparison in fees and services. Use this template to help you make an informed decision.