A Self-Directed IRA’s chief advantage is that it makes it easy to invest in alternative investments: tax liens, real estate, private notes, precious metals, and more. And while this seems like the obvious number-one advantage, there are still people out there who need to know more about self-directing an IRA before they commit to it. So that gets us to a fundamental question: what are the benefits of a Self-Directed IRA? And why do so many retirement investors decide they need one? Let’s explore.

The Benefits of a Self-Directed IRA

The benefits of any IRA are obvious: tax advantages. A retirement account has tax advantages because the government of the United States wants to make sure that investors are incentivized to save for retirement. Saving for retirement has benefits for the economy as a whole, because it helps people build wealth, escape from poverty, or generally build a more comfortable retirement lifestyle for themselves.

On an individual level, these tax benefits are obvious. For example, if an investor were to use a Self-Directed Traditional IRA for retirement, they would be able to enjoy tax savings on those contributions in the short-term, which makes investors more likely to sock money away. Once the money is in the account, investors can enjoy growth on that money that is tax-protected or tax-deferred.

Why Should Investors Use a Self-Directed IRA?

There are a few reasons that investors may want to turn to a Self-Directed IRA to get the most out of investing. For example, if an investor has put away a significant amount of money in an IRA, the IRA may be the only way for an investor to make a large investment when the opportunity presents itself. For example, if an investor sees a piece of real estate that costs a lot of money, a Self-Directed IRA may be an ideal vehicle for investing in that real estate with the tax benefits of the retirement account—as well as the practical use of the money within the account. This is particularly important for investors who have years before they’re able to access the money within a retirement account without significant penalties.

Additionally, there may be more profit potential with some types of investments. For example, let’s say that you had the opportunity to invest in a young Amazon when it was a private company. Doing so with an IRA would be an obvious way, in retrospect, to earn a lot of money through investing. In the stock market, astounding returns like this aren’t always so plentiful. For this reason, the wider range of retirement assets can be beneficial, particularly for investors who already have a lot of experience with a specific asset class.

Is Now the Time to Invest in a Self-Directed IRA?

It might sound like it’s more complicated than it really is. But a Self-Directed IRA can be a stellar way to invest, and it can be much simpler than many investors believe. It simply requires setting up an account with a Self-Directed IRA administration firm who can serve as custodian on the account. You can then issue your buy/sell orders to this custodian, allowing them to handle the administration and paperwork on the account. You, in the meantime, will be in charge of the investments themselves, deciding how you want your portfolio to look.

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 www.AmericanIRA.com.