Many investors are well aware of what it means to use a Self-Directed IRA. Working with an IRA custodian, for example, means having access to a wide range of potential retirement asset classes. This includes everything from real estate and tax liens to precious metals and more. But before explaining how to invest with a Self-Directed IRA, we first have to address something even more fundamental: how to set up an IRA in the first place.
While this might seem like a complicated process, we here at American IRA like to distill it down into its basic steps. Here’s what you’ll need to know to properly set up your Self-Directed IRA so you’re ready to invest in the asset of your choice.
Step One: Research the Best Self-Directed IRA Administration Firm
Research is key at every level of investing. But it’s especially important when you’re choosing a relationship that you may hold with a company for decades. Since now is the time, you’ll consider which Self-Directed IRA administration firm you’ll work with, take the time to consider its best attributes and whether those fit with your plans. Pay special attention to these two factors:
- Fee structure. Here at American IRA, we use a simple static fee structure so that you can build up a large portfolio of Self-Directed IRA assets without having to pay more as the value of the account increases. This is in opposition to Self-Directed IRA administration firms with dynamic pricing structures—or fees that go up as the value of your account goes up, too.
- Experience. A custodian is only as good as the services they offer. Here at American IRA, our experience in investing with everything from precious metals to real estate allows us to offer those services on behalf of the IRAs we represent.
Step Two: Choose Your Self-Directed IRA
Once you know which Self-Directed IRA administration firm you want to partner with, the next step is to choose the IRA that fits your current situation. For example, maybe you have a 401(k) through your place of employment and are in the market for a new Roth IRA. That makes your decision a cinch. Once you know what you want, you can head over to our Self-Directed IRA forms to fill out an application kit.
Step Three: Fund and Choose Your Investments
Once you have the application kit sorted and are working with the Self-Directed IRA administration firm of your choice, you’ll find the process is pretty straightforward. But there is one final step to making sure you’re ready to invest. That’s funding and choosing your investments. Funding can come in a number of forms. For example, you can make contributions directly to your account and begin investing that way. Or you can transfer an old account or roll over an existing account into a new one with American IRA. It will all depend on your specific situation; if you need advice, now’s the time to consult a tax professional.
These three steps show how simple the process of setting up a Self-Directed IRA can be. But nothing happens unless you take the first step! Now’s the time to figure out what you want your retirement to look like. No one else is going to handle it for you.