There are numerous reasons people choose to transfer and/or rollover their retirement account to a self-directed IRA. The main reason is to protect their savings from a volatile stock market or unpredictable changes in the economy. By diversifying their investments, they have a greater opportunity to stay on track with their retirement goals.
Self-directed IRAs are also known to perform much better than stocks and bonds. A recent examination of self-directed investments held at IRAR suggests that investments held for 3 years had an ROI of over 23%. This is why most investors are self-directing their retirement.
Although both rollovers and transfers allow you to move your retirement savings from one financial institution to another, the process for each is different, and each have different rules.
A 401(k) rollover occurs when you move retirement funds from an employer-sponsored plan to an IRA— this is why it's also called a Rollover IRA. This option is typically chosen when an employee leaves a job and is no longer contributing to the employer-sponsored retirement plan.
A Transfer is when you move your IRA to another IRA at a different institution. In the case of a transfer, funds or assets are sent between institutions, from the previous custodian or trust company to the new one. This is not only the quickest, but also the best method of moving your IRA to a self-directed IRA.
IRA-to-IRA transfers are easy and the best way to move your retirement savings from one custodian to another. For example, you would do a transfer when moving an IRA from broker dealers like Fidelity, Schwab, Vanguard, TD Ameritrade, etc. to IRAR.
Transfers are initiated at the company where you want to move the IRA. For example, if you wish to move your IRA to IRAR:
You can transfer as much as you want or only the portion of your account you wish to invest in alternative assets— investment options typically not available or allowed at your current provider such as real estate.