Self-Directed IRA LLC

What is a Self-Directed IRA LLC?

You might have heard of LLCs. You might have heard of Single Member LLCs. And at this point, you have a solid grasp of what it means to start a limited liability company like this. But then you hear someone talk about a Self-Directed IRA LLC and that throws everything on its head. Just what is this type of business arrangement, why do investors use it, and how might it help you save for retirement? Here’s everything you’ll need to know to get started learning about the Self-Directed IRA LLC.

What is a Self-Directed IRA LLC in Practice?

This is an LLC that you hold within a Self-Directed IRA, granting you “checkbook control.”

Not enough? Okay, let’s zoom in. An LLC is a business you can establish to separate some of your personal holdings from business holdings. That part’s straightforward enough. With an LLC, you also reduce some of your personal liabilities that may come from doing business. And in a general LLC, you can control the checkbook of the business, deciding where its money goes.

For Self-Directed IRA investors, it’s that latter portion that’s of particular interest. You see, with most retirement accounts, there is an issue of control—or rather, lack thereof. If you have a straightforward IRA with a brokerage, for example, you may only be able to choose from a certain number of stocks and funds. Working with a Self-Directed IRA custodian means you can use your IRA to invest in a broad range of retirement investment assets, such as real estate and precious metals.

The LLC gives the investor another point of control. By holding an LLC within an IRA, the checkbook control of that LLC reverts to the IRA owner. This makes it possible for Self-Directed IRA holders to exercise a tremendous amount of control and flexibility in determining what goes into the retirement account.

Why Do Investors Use Self-Directed IRA LLCs?

Because the LLC in this case is owned by the IRA, there are tax benefits that come with handling things this way. The LLC is under the umbrella—and rules—of retirement investing. In your role as manager of the LLC, you can direct its investment activities as you see fit, provided that they don’t violate any retirement investing rules.

For example, an LLC held within a Roth IRA would have tremendous benefits—as Roth IRAs use post-tax money for funding, eliminating the need to pay taxes on distributions from the account after hitting retirement age. Consult with a tax professional to get a clearer sense of how these tax protections can work when using an LLC within an IRA of any type.

How Do Self-Directed IRA LLCs Help Investors Save for Retirement?

At first glance, the idea of using a Self-Directed IRA LLC might sound like an additional and unnecessary step in your path toward financial freedom. Do people really need to hold an LLC within a Self-Directed IRA account to exercise the kind of control they want? The answer is: sometimes, they do. It all depends on your goals and the way you want to achieve them.

Having a Self-Directed IRA LLC will help you exercise more flexibility and control. The question is: does your investment style necessitate that level of flexibility and control? It may be that it does. Or it may be that having a Self-Directed IRA custodian to work with is enough for you.

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