Self Directed IRA – Five Popular Questions About Opening One

If you’re here because it’s the first time you’ve thought about opening a Self Directed IRA, it’s important to realize that you’re not alone.

There are a lot of people out there who’ve never even heard of a Self Directed IRA, let alone are aware of the fact that they have lots of different retirement investment options available to them like private companies, real estate, and even precious metals. Too often, people are sold the traditional method of retirement—which works well for some people, but isn’t always the most prudent option for others.

So it makes sense that you might have a few questions about Self Directed IRAs and what they can do for you. Let’s answer some of the basic ones so you can get a more solid grasp on what these accounts are and how they can help you build a stable retirement portfolio.

Question #1: What can I invest in with a Self Directed IRA?

It’s probably more interesting to ask what you can’t invest in, which includes items like art and wine. There are so many options with investing in a Self Directed IRA that you really won’t feel very constricted. You can invest in real estate, in private companies, in precious metals, private IRA lending, tax liens, and more. As long as you know the rules for these investments—for example, you can’t live in the real estate you invest in through a Self Directed IRA—you are afforded a lot of freedoms.

Question #2: What can’t I invest in with a Self Directed IRA?

We touched on this in the last question, so it only makes sense if you’re curious. You can’t invest in life insurance, collectibles like works of art, gems/jewelry, coins (except for U.S.-minted coins), alcoholic beverages like wine, and tangible personal property. You’re free to invest in these on your own, outside of the purview of a Self Directed IRA, but they can’t be held as part of your retirement account. This isn’t to say that they’re bad investments; they’re simply prohibited.

Question #3: What kinds of accounts are available for Self Directed IRAs?

The same as all IRAs. Roth IRAs, traditional IRAs, 401(k)s, Solo 401(k)s, SEP-IRAs, and the like. The same rules apply here: the difference is that you’re taking charge of your financial destiny. It’s important that you do know your limits, as explained in the question above, and that you understand how these accounts work. But a “Self Directed IRA” is not its own category of different, separate kinds of retirement accounts, and that’s the important distinction to make. The IRA accounts available to you are the same types of accounts that have always been available to you.

Question #4: How do I fund this kind of retirement account?

Contributions, conversions, rollovers, and transfers. Each comes with its own definition and set of rules—we’ll refer you to our How it Works section so you can better understand the nitty-gritty of opening a Self Directed IRA.

Question #5: How do I get started with a Self Directed IRA?

You’ve already started! Now that you’re reading about these, you’re free to continue browsing our site, call us at 1-866-7500-IRA(472) to get more information, or download one of our free Self Directed IRA guides to learn more. After all, there are few things more important in life than establishing a foundation upon which you can raise a family and expect to enjoy your retirement with financial security. Taking hold of the reins might seem scary at first, but you can be sure that there are many investments out there that can suit your individual style.