Self-Directed Checkbook IRA

The Best Self-Directed IRA Accounts for Budgetary Flexibility

Before COVID-19 hit, many Americans were already hurting. In 2019, it was reported that many Americans couldn’t even make a $400 emergency payment—that’s how razor-thin their budgets were, as many in the middle class lived paycheck-to-paycheck. How, then, should someone expect that the common investor can put aside money for retirement when asset prices are low? One answer may be in the Self-Directed IRA.

But the Self-Directed IRA isn’t any one type of account. It’s a way of managing retirement accounts with more flexibility and independence, giving investors the flexibility to handle a strained budget while still stocking money away for a rainy day. Here are some of the most common Self-Directed accounts and how they might benefit a family struggling in tough economic times.

The Self-Directed Roth IRA: Money for a Rainy Day?

One of the primary issues for many investors is that of liquidity. In a Self-Directed Roth IRA, you’ll put aside after-tax dollars. This might seem like the most expensive way to set aside retirement money—after all, you’re not getting a tax deduction—but keep in mind that with taxes already paid on these contributions, you can easily access the contributions in times of economic trouble.

That’s not to say that the Roth IRA should double as your emergency fund. A properly-funded emergency savings account will do a much better job of keeping you cushioned. But if there is an emergency that requires dipping into retirement, a Self-Directed Roth IRA can sometimes be the most tax-efficient way to do it.

The Self-Directed Solo 401(k): Maximizing Your Retirement Dollar

With a Self-Directed Solo 401(k), you’ll have three chief advantages:

  • High contribution limits.
  • An independent retirement account that can stay with you.
  • Making tax-deductible investments.

Having an independent retirement account is a powerful way to uncouple yourself from any particular job. If you’re self-employed and work from home, you’ll be especially resilient when there are problems like what we’re seeing with COVID-19. But that independence should extend to your ability to invest your money as you see fit. Using a Self-Directed Solo 401(k) will give you more flexible options for creating a diversified portfolio, as will any of the Self-Directed options on this list.

The Self-Directed SEP-IRA

Are you self-employed? Then there’s another account that you might want to think about. The SEP-IRA is a powerful way for self-employed investors to put tax-deferred money into retirement. Like the Self-Directed Solo 401(k), a SEP-IRA makes it possible to make tax-deductible contributions to your retirement. This is a powerful way of investing when you want to maximize the value of your dollar.

Another advantage of the SEP-IRA is that it has very low maintenance costs. It’s easy to operate and the start-up costs are low; it’s usually a matter of filling out some paperwork with the appropriate fees and—voila! You’re off to the races.

A SEP-IRA also makes it possible for you to help your employees by contributing to their retirement benefits. If you don’t have any employees besides yourself—as a self-employed individual—don’t worry, you don’t have to have them. But if you do have employees, a SEP-IRA can be a great way to ensure they continue to have a retirement plan even in tough economic times.

Self-Directed IRAs and a Better Budget

Whether you go the tax-deductible route or the Roth IRA route, there are plenty of ways you can give yourself more budgetary flexibility when you direct your own IRA. 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

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