New to Self Directed IRA -Answers to Frequent Concerns

When you tell people–sometimes, even investors with multiple years of retirement investing experience–about the idea of directing their own IRA, be prepared for them to blink. The idea, after all, is not ubiquitous. Sure, it’s out there, and you’ll find many people who run their own Self Directed IRA with great success. But in the mainstream world of investing, discussion is generally held to IRAs full of managed assets like mutual funds.

That’s all relatively harmless, of course, until a new investor starts learning about a Self Directed IRA and says “wait a minute! Why haven’t I read about all of this before?” The truth is, Self-Directing an IRA might seem like a heavy burden to the uninitiated. That’s why it’s no surprise that new investors looking for ways to grab a hold of their financial destiny have some concerns about this thing called the Self Directed IRA. Let’s answer a few of those concerns right now:

“Why haven’t I heard about the Self Directed IRA?”

Think about it this way: the concept of the IRA is actually very well-known. It’s merely the idea of managing your own IRA and using it for different investment types like real estate and precious metals that’s new to many investors. You’ll hear about IRAs and all sorts of different IRA types when you listen to personal finance advice, but you’re rarely exposed to the idea that you can do your own investing with them.

Why is that? Well, you’ll have to ask each personal finance guru that individually to get the real answers. But one potential answer is that many gurus simply want to give their audience easy, quick solutions without adding what they perceive to be unnecessary options. But we say knowing your options is a good thing.

“If Self Directed IRAs are so great, why doesn’t everyone do them?”

Some estimates suggest that about 5% of retirement investors are investing in non-traditional assets, which is to say assets other than stocks, bonds, and CDs. Why only 5%? It’s a good question. One issue is popularity: the Self Directed IRA in non-traditional investments is simply not as well-known a strategy as the usual route.

There are also some misunderstandings about nontraditional investments. Many people view the stock market as a solid long-term investment, and there’s nothing wrong with that view. Buy viewing it as the end-all, be-all of investing? That’s a different story entirely. Unfortunately, many people can be better off in times of volatility with a well-diversified portfolio.

“I already have an IRA. Is it a big deal to switch it to a Self Directed IRA?”

Well, that depends on what you mean by “big deal,” but no: in our estimation, it’s actually a relatively quick and painless process. Rolling over retirement accounts is actually a very common strategy and you’ll see it happen all the time with people who want to change strategies or people who are simply switching employers.

Many people view the Self Directed IRA as this special IRA “type,” but in reality it’s just like any other IRA; you’re simply choosing non-traditional investments on your own rather than having a fund manager handle everything.

“Do I still get financial protections in a Self Directed IRA?”

Yes. They’re still IRAs, after all, and they come with the same benefits you can expect from any IRA.

As you learn more about Self Directed IRAs, you’ll likely find that many of your concerns don’t have to be concerns at all. But we do encourage to learn as much as you can on your own. If you have any questions, don’t hesitate to continue reading or contact us at 1-866-7500-IRA(472).