Self-Directed IRA – What They Don’t Tell You About Them

When you’re starting out in the world of retirement investment, you notice a few common themes. You’re supposed to invest in stocks and bonds with an eye on long-term success. You’re supposed to have a straight-forward, “usual” IRA with one of the major brokerages. You’re supposed to do X and Y. But they never tell you about Z. In this case, the “Z” is the Self-Directed IRA, and as it turns out, it’s not only a viable option for retirement planning, but in many cases can be the superior option.

Don’t believe us? That’s okay; many people who don’t know about directing their own Self-Directed IRA are skeptical at first. That’s why we like to debunk some of the most pervasive myths and explain what they haven’t told you about this alternative—but equally valid—method of retirement investing:

You Can Use a Self-Directed IRA for Just About Any Type of Investment

The IRS allows a lot of leeway when it comes to retirement investment. You wouldn’t know this to look at most of the major brokerages: they just want to sell you funds, and funds alone. These funds touch on the stock market and on the bond market, and little else.

But what if you want more than just that in your IRA? What if you don’t believe that the stock market is the end-all-be-all of investment? What if you have a rich history of investing in real estate, for example, and you want that rich history to continue into your retirement days? Then you’ll want to think about a Self-Directed IRA, wherein each of these investment types isn’t only available, but they’re highly protected through the usual IRA channels. Consider the options you have for investing when directing your own IRA:

  • Gold, silver, and other precious metals
  • Real estate
  • Private companies
  • Private IRA lending
  • Tax liens

If you truly want a “diversified” portfolio—as so many financial planners recommend—then you’ll want a portfolio that includes more than just stocks and bonds.

There are Just as Many Protections in a Self-Directed IRA

The protection of the retirement account is one of the reasons most personal finance websites will recommend that you max out your savings in retirement as much as possible.

This protection doesn’t simply vanish when you choose to self-direct your IRA. In fact, you’ll find that there are some protections that make investing through a Self-Directed IRA advantageous. For example, consider real estate: by using non-recourse loans with your real estate investments through an IRA, you’ll have minimal risk of exposing the rest of your assets to the creditor. In a non-recourse loan, a creditor can only come after the value of the asset involved—they can’t come for the rest of your money.

That’s the kind of security you’ll want to have if you expect to feel truly protected. A phrase like “Self-Directed” might seem scary or intimidating to some, but the truth is, these investments can have many more protections than traditional general investments.

Your Money Means Your Choice

If you’re sick of the traditional advice that doesn’t expose you to the idea of Self-Directed IRAs, you’re not alone. Many people are turned off by the ‘one-size-fits-all’ approach to retirement and are looking for alternatives that make more sense for them. If you’re interested in learning more about directing your own IRA, be sure to keep reading our posts here, as well as the many guides you’ll see in the navigation panel. And if you still have questions, don’t hesitate to contact us at 1-866-7500-IRA(472).


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