Frequently Asked Questions About Self-Directed Traditional IRAs

FAQs About Choosing a Self-Directed IRA

When it comes time to choose a Self-Directed IRA, do you feel empowered? Or do you feel intimidated? If it’s the latter, we at American IRA want you to know that you don’t have to feel this way. In fact, you can go into choosing a Self-Directed IRA with confidence—as long as you answer a few questions for yourself first. To help aid with that, we’ve put together a few frequently asked questions (FAQs) from investors who are considering a Self-Directed IRA and aren’t sure which to use.

Question: Should I go pre-tax or post-tax?

Answer: To answer this question, we first have to talk about what “pre-tax” or “post-tax” is. This refers to the contributions you make to your Self-Directed IRA. When you can deduct your contributions, it’s known as “pre-tax,” because you’re postponing the paying of the income tax on this money until you reach retirement age and take distributions from the account. With an account like a Roth IRA, however, you would use after-tax money. This is ordinary money upon which you already paid income taxes as you always would, allowing you to have tax-free benefits in retirement.

Which should you use? Unfortunately, we have to direct you to your own financial advisor or accountant, because only they can tell you which arrangement will have specific benefits according to your unique situation or income level.

Question: How do I know which IRA to select?

Answer: This is the million-dollar question. There is no one-size-fits-all answer to this question. For example, if you have a small business, a SIMPLE IRA can be an arrangement that makes sense for you and your employees. But what if you don’t have a small business? It changes the equation. That’s why we recommend reading up on the different IRA types to get a sense of which one is the fit for you. The most important thing is to introduce yourself to more information and education, so you’re exposed to different ideas. Chances are, you may stumble upon something that’s an ideal fit for your situation.

Question: Who should I talk to about selecting IRAs?

Answer: Here at American IRA, our primary function is as a Self-Directed IRA administration firm. We help people with record keeping, paperwork and administration on accounts, but we don’t make decisions for them, nor do we make specific investment recommendations. That means that if you’re using a Self-Directed IRA, you’ll want to make sure you have good people around you, such as an accountant that you trust, and financial advisors.

That said, any investor has the power to select their own IRA if they so choose, and assuming they qualify for that specific account type.

Question: What steps should I take once I’ve made a decision?

Answer: When you’ve selected an account type, it’s time to begin the application process. That’s where we come in. Here at American IRA, we offer Self-Directed IRA administration services to people who are at this stage in their investment journey. Working with American IRA as the custodian, you can direct us to carry out the paperwork for your investment decisions. This helps you establish the proper boundaries between you and your IRA, particularly with assets that can be complicated to hold within the IRA, such as precious metals.

Once you understand the distinction between personal and retirement assets, you’re on your way to understanding how the process works. 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