Nearly Half a Million Investors Choose Self-Directed IRAs – Here’s Why.

Self-Directed IRAs are nothing new.

The Individual Retirement Arrangement goes back to the passage of the Employee Retirement Income Security Act of 1974. And while the vast majority of accounts since then have been focused on conventional assets such as mutual funds, stocks, bonds, annuities and CDs, the law has always allowed for all kinds of alternative asset classes as well, since the very beginning. American IRA founder and CEO Jim Hitt has been using his own personal IRA to hold investment real estate for his own retirement security since the early 1980s. It has worked out so well that he founded the company to help other investors do the same thing. Since then, American IRA, LLC has helped thousands of investors leverage the tax advantages of Self-Directed IRAs, Roth IRAs, 401(k)s, SEPs and other tax-favored accounts with real estate, gold and precious metals, and many other alternative asset classes.

But the self-directed retirement account industry has generally been fragmented, and overall statistics about self-directed investing have been hard to come by. But recently, we have been able to learn more about how widespread and popular Self-Directed IRAs and other retirement accounts have become among the investor class.

According to the Investment Company Institute, the total amount of assets in IRAs totaled $7.3 trillion, with an additional $4.7 trillion in 401(k)s.

According to research from the U.S. General Accounting Office, there were nearly half a million self-directed retirement accounts nationwide: 488,333 was the official tally of the number of accounts, with somewhat fewer actual investors, since some investors may own more than one retirement account.

The total value of all accounts amounted to nearly $50 billion.

The number self-directed retirement accounts identified by the GAO broke down as follows:

  • IRAs: 485,517, with a total combined balance of $49,768,207,085
  • Solo 401(k)s: 2,816, with a total combined balance of $187,692,662.

Solo 401(k)s make up less than 1 percent of the total number of Self-Directed IRAs, as of 2015, and less than 1 percent of the total amount of assets.

The Self-Directed IRA and self-directed 401(k) markets, then, are still quite small, niche markets. But those who use these strategies tend to be educated and affluent and attractive clients to financial services professionals.

These are 2015 numbers. The total number of plans and the amount of assets within the plans have undoubtedly increased in the interim. As of this writing, the Dow Jones Industrial Average has just closed over 22,000 for the first time, bringing a lot of equity portfolios up with it. Real estate prices have also gone up over the last two years, as well.

Why Do Investors Choose Self-Directed IRAs?

The GAO surveyed custodians and administrators to learn why their clients chose to use Self-Directed IRAs and alternative asset classes in their retirement portfolios. Nine out of the 17 custodians surveyed reported multiple reasons: Avoiding the stock market, diversifying their retirement portfolios, concentrating on familiar assets, investing in a tangible or familiar asset, or investing in a company that is not yet publicly traded.

How to get started

With stocks hitting record highs, finding ways to diversify a stock-heavy portfolio into other asset classes may be more important than ever.

Getting started with self-directed investing is very easy – especially for experienced investors who understand investments like real estate, precious metals, corporations, partnerships and LLCs and other common alternative investments for retirement accounts. First, open an account with American IRA, LLC, and fund it. Then find an investment that is suitable for you. Send us supporting documents and tell us where to send the money. We will maintain the title, deed and other ownership documents on your behalf.

To learn more, call us today at 866-7500-IRA(472), or go online at and fill out the new account forms. If you have questions or trouble with the forms, call us and we will gladly walk you through them.

Our offices are in Charlotte and Asheville, North Carolina, but we work with Self-Directed IRA owners and solo 401(k) owners all across the country. We look forward to working with you.

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