A Self-Directed IRA is simply an individual retirement arrangement (IRA) in which the owner retains responsibility for the key investment decisions, and in which he or she retains the ability to invest in nearly any asset under the sun, according to his or her own risk tolerances and investment objectives.
They are distinct from conventional IRAs, which are generally offered by investment companies and annuity companies, and which generally restrict your investments to common, off-the shelf financial products, such as mutual funds, exchange-traded funds, closed-end funds, money markets, certificates of deposit, and the like. That is, paper products, from which they are able to generate income for the firm in the form of commissions, 12(b)1 fees, bid/ask spreads, AUM fees, and various other charges, both declared and hidden.
In a Self-Directed IRA, however, you are not restricted to the options Wall Street companies want you to know about. Instead, you can direct your investment dollars into nearly investment option you can imagine, with just a few exceptions.
The Self-Directed IRA is a tremendously versatile and powerful tool – especially for those who have expertise or a marked competitive or informational advantage in one or more given fields of business or investing. By opening a Self-Directed IRA with American IRA, LLC, you can put yourself in the driver’s seat, and direct your investments in these asset classes:
- Venture capital
- Real estate
- Private equity
- Raw land
- Foreign real estate
- Private lending
- Hard-money lending
- Farms and ranches
- Horse and livestock breeding/husbandry
- Tax liens and certificates
- Closely-held corporations
- Partnerships, limited partnerships and limited liability companies
- Hedge funds
- Untraded securities
- Master limited partnerships
And much more!
The only things you cannot hold within a Self-Directed IRA are life insurance, alcoholic beverages, art/collectibles, gems and jewelry and certain kinds of precious metals of uncertain or insufficient purity and quality.
Advantages of Self-Directed IRAs
Self-Directed IRAs allow for the same tax and asset protection benefits that conventional investment-company-run IRAs confer, except with more flexibility and potentially lower costs, depending on the investment choices you make.
Self-directed traditional IRAs can provide:
- Asset protection up to $1.25 million and growing
- Diversification: Many assets popular among Self-Directed IRA owners have a very small or even a negative correlation with the U.S. equities or debt markets. Including these asset classes may help increase returns, lower volatility or risk, or both.
- Pre-tax contributions if you qualify
- Tax deferral on income from dividends and interest regardless of income
- Elimination of capital gains tax worries.
- Unlimited trading, tax-free
- Control over tax timing (subject to required minimum distribution rules)
You can also choose to use self-direction with Roth IRAs. With Roth IRAs, you do not get to make pre-tax contributions, but your assets grow tax free once they’re inside the Roth IRA. There is no tax on capital gains, nor dividend, rental and interest income once assets are placed within a Roth IRA account. There are also no required minimum distributions, since you already paid your income taxes on the money you contributed.
Roth IRA accounts are an excellent way to pass money to heirs, as well.
How to Get Started
Opening a Self-Directed IRA that allows you to invest in nearly any asset class other than those specifically listed above as prohibited is very easy. To get started, visit www.americanira.com. American IRA, LLC, is America’s leading authority on Self-Directed IRAs and other forms of self-directed retirement investing. We are a third party administrator of IRAs and other tax-favored accounts and we work with investors and self-directed retirement account holders all over the country. At our website, you can read hundreds of educational, informative articles about all manner of topics of interest to retirement savers. You can also download our exclusive guides to self-directed retirement investing.
Please give us a call today at 866-7500-IRA(472) for a free, no-obligation consultation. We look forward to working with you!
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