Self-Directed IRA

How to Set Retirement Goals You Can Achieve with a Self-Directed IRA

Using a Self-Directed IRA means you have a definitive plan for building a retirement nest egg. But what if you are unsure about your goals? It’s one thing to have a plan of action—it’s another thing entirely to have an idea of where you want to go. With that in mind, let’s look at some Self-Directed IRA strategies you can start implementing with an eye on building achievable goals that land you with a comfortable, prosperous retirement.

Setting Retirement Goals: Know Your Retirement Number

Many people choose to set retirement goals by one of two variables: how much money they will need in retirement, or when they want to retire. But the best way to set a plan in stone is actually to combine these two numbers. You want to know how much money you need to retire, and then create a deadline for achieving that.

  • The first step is to employ a retirement calculator. To use this calculator, you will have to know roughly how much you plan on investing every year, what kinds of returns you can expect (depending on the type of asset classes you are using), and the current principle you already have invested. This is a great way to get a clear idea of how much money you will need in retirement and what your current plan will land you.
  • Using the information from the calculator above, you will then be able to get an idea of when you will have the amount of money you need to retire comfortably. Using the “4%” rule, you should aim at a retirement nest egg from which you can withdraw 4% to comfortably afford the lifestyle you want.

If there is a discrepancy between these two numbers—i.e., you want to retire earlier than the current estimator says you can—then you will have a clearer idea of what you need to implement to get a different sort of process in gear.

How to Incorporate Self-Directed IRAs into a Set of Retirement Goals

Once you have these basics down, you should be able to break it down into smaller milestones. You will have an idea of how much money you need to put away each year—which gives you a monthly target to hit. But if you have multiple retirement accounts (such as a Self-Directed Roth IRA on your own, in addition to a company matching 401(k)), it can be a little more difficult to decide where things should go. Where should you put money? What kinds of investments should you be making?

When it comes to self-directing your own IRA, you should tend to invest in what you know. For example, someone who has done a number of real estate deals in the past and who knows that they can generate an income via real estate is an ideal candidate for starting up a Self-Directed IRA. They will be able to utilize real estate to build a cash flow in retirement that’s in tune with their goals.

But if you are inexperienced, you may also want to take a conservative approach. Feel free to invest your retirement contributions in stock funds through other accounts as you learn something new in self-directing your own IRA.

The key is to start with the end in mind. If you have a vivid picture of what you want your retirement to look like, then you will be able to break down your goals into a yearly plan. How much do you need to put aside this year? It all depends on where—and when—you want to end up with a secure retirement.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at