Self-Directed Roth IRAs

What You Need to Know About Self-Directed IRAs for Private Companies

When you think about Self-Directed IRAs, you probably think of the different retirement assets you can use. For many people, that might mean something like investing in real estate or precious metals. But one thing that not many people consider is the wide range of possibilities through a Self-Directed IRA that can include investing in Private Companies. But what is it, what does it look like, and what are the options you have available? Here’s everything you’ll need to know.

Investing in Single Member LLCs through a Self-Directed IRA

One of the most powerful and flexible ways of investing with a Self-Directed IRA is to use a Single Member LLC within the IRA. This is a company you can set up with its own bank account. By keeping this company within the IRA, you can then let the “checkbook control” over that bank account revert to the IRA, which belongs to you. This is a unique arrangement that lets investors exercise a lot of freedom when using a Self-Directed IRA. In fact, it may be the arrangement that makes retirement investing feel like any other type of investing.

However, even with that knowledge, you will still have to remember that your Single Member LLC within a retirement account has to stick to the rules. You can’t use this arrangement to get around the rules; after all, it’s still investing within a retirement account. But once you know the rules and you establish the LLC with the help of a Self-Directed IRA administration firm, you’ll be amazed at how easy and intuitive this style of investing can be.

Investing in Private Stock through a Self-Directed IRA

In the arrangement above, you’re essentially buying 100% of a Single Member LLC that your IRA owns. But it’s possible to own private stock in different ways as well. In fact, it made international headlines when it was revealed that investor Peter Thiel had apparently put a substantial amount of private equity wealth into a Roth IRA. Because of the rapid growth of that stock, it yielded potentially billions of dollars that Thiel could access tax-free upon hitting retirement age. That’s one of the big appeals of investing in private stock: what if you were to hit upon the next big company at an early stage of that company’s career? The potential for growth is boundless.

Investing in private stock, however, is like any other type of investment. It will require dedication to due diligence. It will require that you do your homework and learn what private equity investing is all about. However, once you do this homework, you’ll see that there is a lot of potential for growth, especially when you don’t know what the public stock market will do. Because this is an alternative asset class, it can bring a substantial amount of diversification to a retirement portfolio.

Learning How to Invest in Private Companies

Like any other type of investing available through Self-Directed IRAs, it requires wisdom and know-how to navigate this world. However, that doesn’t mean that if you’re inexperienced, this world is unavailable to you. You simply have to read up on the possibilities, learn the ropes, and work with experienced people. One of the most important things you can do is to team up with a Self-Directed IRA administration firm who will help you get started the best way. At American IRA, you can learn all about what we do, as well.

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