What Is a Self-Directed IRA?

A Self-Directed IRA with the addition of a Checkbook LLC gives investors the flexibility and freedom to invest your own wealth, in real time, with no extra paperwork and no transaction fees. If you’re ready to diversify your savings out of volatile Wall Street stock and bonds, and you’re interested in driving your own retirement account, the Ultimate Self-Directed IRA is for you. A self-directed IRA —sometimes referred to as an “Alternative IRA”— puts you in control of your financial future, providing you the flexibility and control to invest in assets that you know and understand the best. This is because the power of a self-directed IRA comes from the almost endless investment options. This retirement platform allows you to diversify your savings assets beyond Wall Street, into real assets like real estate, promissory notes, tax liens, private businesses, precious metals and more. Plus you reap the asset protection and all of the tax advantages that come with government-sponsored retirement plans. Self-directed IRA LLCs have been legal for more than 20 years, as validated by a series of important Tax Court decisions. One of the most common and accepted ways to set up a self-directed IRA is through the creation of a separate legal entity such as a limited liability company (LLC). Your IRA owns this LLC and has you as the sole manager to make decisions, write checks and manage investments following tax code rules. These investments can include certain precious metals, real estate and a host of other non-traditional assets, as well as traditional stocks, bonds and mutual funds. (See Internal Revenue Code Section 408 for further guidance, particularly 408(m), which deals with precious metals.)               

Self-Directed IRA Advantages

  1. Investing Diversity: With a Self-Directed IRA you can diversify beyond the market into assets such as real property, tax liens, mortgage notes, precious metals, foreign currency, plus much more. If you have expertise with a certain asset type, you can invest in what you know best to create and secure your financial future.
  1. Tax-Advantages = Lasting Wealth: Investing over time in a tax-advantage account like a Self-Directed IRA (tax-deferred/tax-free profits, plus the possibility of large tax deductions) can have a tremendous affect on future wealth. Combine those benefits with the ability to truly diversify and invest in a full range of assets could be a winning combination.
  1. Investment Knowledge: Invest in the assets you know and understand the best
  1. Secure Hard-Earned Assets: Self-Directed IRAs are afforded protection under federal bankruptcy laws to ensure assets are secure.
  1. Provide Wealth for Your Future Generations: Certain Self-Directed IRAs allow the passing of assets to beneficiaries after death with little or no tax implications, allowing you to stretch wealth over generations.