Self-Directed IRAs

Why Aren’t Self-Directed IRAs More Mainstream?

Given that a Self-Directed IRA makes it possible for investors to take the reins over their own retirement future, it is easy to think that they should be more popular. Back in 2017, when the American IRA blog looked at this very issue, we found statistics that suggested there were about half a million Self-Directed IRAs active in the United States, managing almost $50 billion in assets.

It might sound like a lot. But across the United States, mutual fund assets held in retirement accounts totaled $10.1 trillion as of September 2020.

Why is that? What explains the discrepancy between the usefulness of Self-Directed IRAs and the fact that so many people choose other routes for their retirement investing? We have a few thoughts.

Reason #1: Misconceptions

Some people might have heard of the Self-Directed IRA but have put so little research into it that they only harbor the misconceptions that they have heard. For example, an investor might think that Self-Directed IRAs are only for real estate investing, since they have heard of people doing that before. Or they might imagine that Self-Directed IRAs are only for the self-employed because they only hear of self-employed people using them.

These misconceptions are easy to clear up, but it takes an interested investor doing their own homework to uncover just how incorrect they might be.

Reason #2: Lack of Knowledge

Simply put, Self-Directed IRAs are not all that new to history. For many people, stocks and funds were the typical (and often only) investments for a long time. In 1974, after the passage of the act that allowed the creation of IRAs, retirement accounts have been available for a wide range of potential asset classes. American IRA’s own CEO, Jim Hitt, has been using a retirement account to hold investment real estate since the early 1980s.

What does this say about the misconceptions? Many people simply do not know what the Self-Directed IRA is for, or even that it is possible. It takes knowledge of something to use it, after all. And since many people have other priorities throughout their lives—taking care of their family, getting a job, buying a home, etc.—it only makes sense that long-term thinking can sometimes fall by the wayside. People put minimal thought toward retirement because they think it is a challenge for the future, not now.

Reason #3: Lack of Press

Take a look at the recent financial headlines and you’ll see all sorts of different things. Meme stocks. Bitcoin. Big-time CEOs tweeting. But what don’t you see? Unless you look really closely, you won’t find out about Self-Directed IRAs. After all, it is hard to write a sensational headline about something that is inherently about “slow and steady winning the race.” And that can be the case for Self-Directed IRAs. However, Self-Directed IRAs are also potential high-risk, high-reward scenarios for their owners. It ultimately comes down to what the investor is willing to tolerate. And many investors simply do not read about it in the press, so the knowledge bypasses them.

Well, it did not bypass you. If you are someone who is interested in doing their own homework to find out more, you’re at the right website when it comes to Self-Directed IRAs. Since you have landed here at American IRA, you are free to check out our knowledge base on all things Self-Directed IRAs. Browse our website and you can find out more about which account types are available, how funding works, and even the individual investments made possible through a Self-Directed 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