Is There an Ideal Time of Year for Starting a Self-Directed IRA?

Is There an Ideal Time of Year for Starting a Self-Directed IRA?

These days, people who want to invest more independently understand that the stock market can be volatile. It seems like any change in the headlines is enough to send stock markets soaring—or tumbling. This kind of volatility can be tough on an investor’s psyche. That is why Self-Directed IRA investors move to greater diversification in their portfolio, involving investment asset classes like real estate, precious metals, private loans, private companies, and tax liens. This level of diversification adds a layer of security that many investors simply do not experience.

But one thing that can make it overly complicated for investors to get started is to wonder too much about timing. Many investors think that making money is all about timing. But the truth about a Self-Directed IRA is that it is a style of retirement account—and for that reason, timing is not quite as important as you might think. Here is everything you will want to know about the ideal time of year for starting a Self-Directed IRA.

Is Now the Best Time to Start a Self-Directed IRA?

There is an old saying that the best time to plant a tree was twenty years ago—but the second-best time is now.

It is an old saying with a lot of truth to it. Simply put, if you understand the power of compound interest, then you know how powerful it can be to spend time in the market. Compounding interest might not seem like a lot for the next five years, but over a period of fifty years of investing, it becomes an unbelievably efficient way to build wealth.

For that reason, you might surmise that the best time of year to start a Self-Directed IRA is simple: as soon as possible. That means that investors who are wary about getting started should kick off the process, rather than kicking the can down the road.

However, it is important that investors know what they are getting into before they open an account. Here at American IRA, we feature a lot of essential knowledge about Self-Directed IRAs so that there is no confusion about the process. You can even see sample paperwork so you will have an idea about how the Self-Directed IRA will work.

Is There a Best Time of the Year for Starting a Self-Directed IRA?

Let us say that your goal is to use a Self-Directed retirement account such as a Self-Directed Solo 401(k) to maximize your retirement contributions, saving short-term tax money because of the strength of those deductions. If that is the case, then having a Self-Directed Solo 401(k) that is open on the first of the year would obviously maximize your contribution potential, because it gives you the flexibility to contribute throughout the year.

However, keep in mind that making contributions is limited on a per-year basis, which means that even if you were to open a Self-Directed Solo 401(k) account in July of one year, you could make contributions in that year that still total the maximum amount allowable.

This flexibility is an important distinction, because it means that you do not necessarily have to have the “clean break” of establishing a Self-Directed IRA on New Year’s. It is perfectly acceptable to open one at any time of the year and immediately get started with the retirement investing process.

If your goal is to build compound interest, then there is no time to lose in building wealth for the long-term future. A Self-Directed IRA might be the style of investing that is right for you. 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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