Are you tired of mediocre returns with your investment retirement account (IRA)?
Did you know that you can take control of your IRA and use it to invest in just about any type of asset with your IRA funds?
Most investors never know that they can make all types of investments with their IRA money. By using your own self-directed IRA, you can invest in areas other than the standard stocks, bonds, and mutual funds.
With your own self-directed IRA, you can invest where you want – real estate, tax liens, secured loans (such as mortgages), private businesses, etc. With any self directed ira real estate bought by a self-directed roth IRA, any income and capital gains that you incur grow tax deferred with traditional IRAs and even tax-free with Roth IRAs. This is not the same thing as simply borrowing from your 401k or retirement savings.
Opening a Self-Directed IRA
So you are sold on opening a self-directed IRA but how do you start a self-directed IRA?
The first thing you need to do is to find someone who will take custody of your IRA and let you be in charge of it and invest it as you wish. However, most banks and other large financial institutions usually will not let you do this yourself. You should call your bank or brokerage firm that handles your IRA account and tell them you want to transfer your existing IRA into a self-directed IRA. Similar to finding Roth IRA rates, you can try shopping around to find the best IRA rate available.
Often the preferred tool for opening a self-directed IRA with checkbook control is the Limited Liability Company (LLC). The investor owns the IRA – which owns the LLC – which owns the non-traditional assets within. This allows the investor to write checks from the LLC for real estate transactions, the expenses associated with any transactions, and even other types of investments. Such an arrangement can be very beneficial financially with the opportunity for greater returns on investments and even fewer fees.
Make sure you seek the advice of an advisory group that specializes in the drafting of the IRA LLC or Self Directed IRA LLC. Many companies can help you set up an account and also serve as advisors if you need assistance. Self-directed investment retirement accounts can get extremely tricky unless you know all the rules and regulations attached to them. Numerous tax rules limit the types of investments you can make even in a self-directed IRA, so make sure you do your homework before investing.
Using the Best IRA Provider
The best IRA provider we’ve found for a Self-Directed IRA is EverBank. They offer several traditional and Self Directed IRA opportunities that can help you achieve your retirement savings. By providing great diversification opportunities with a variety of domestic and global assets and the flexibility to roll over your IRA to another EverBank IRA as your needs change, EverBank has earned our top recommendation over all other IRA providers.
- Get started and open your EverBank IRA today!
Self-Directed IRA Investing
Self-directed IRA investing gives you much more freedom as to the different types of investments that you can make. By investing in your own self-directed IRA you still have to comply with the federal tax laws governing IRAs. However, usually your plan documents are far less restrictive which allows you opportunity for all sorts of real estate investments (domestic and foreign) and other complex transactions. Another advantage is that self-directed IRA investing will also have far less fees attached.
Investors that choose to start a self-directed IRA over a regular IRA usually do so with the hopes that they can yield higher rates of return through unconventional investments and assets. However, the self-directed IRA is considered to have a higher risk then traditional or roth IRAs. Make sure you are aware of the different types of investment risks before proceeding.
The Best Self-Directed IRA
After discovering that self-directed IRAs is not as simple as just opening an account, many investors feel more at ease sticking with standard IRA that include stocks, bonds, and mutual funds. But for people who want more control of their IRA and are interested in diversifying beyond the traditional assets available through a standard IRA, it might be a good idea to look into opening a self-directed IRA and see if it will work for you and your investment goals and strategies.
When you are saving for your retirement, your money definitely needs to work as hard as you do. Having any type of IRA will help you reach your retirement and savings goals faster than most other alternatives. Self-directed IRA investing is often an underrated tool that investors simply didn’t know they could use.
Self-directed IRAs, by allowing a wide range of investment choices, improve the account owner’s opportunities to diversify their IRA portfolios.