Self-Directed SEP IRA

The Advantages of Opening a Self-Directed SEP IRA

Although it’s a powerful way to set aside a lot of money for retirement, you might be surprised to find out how few investors actually know about the Self-Directed SEP IRA. That may be because the SEP IRA does have a specific requirement: you have to be a self-employed to take on this type of account. But if you do qualify for a SEP IRA, you can use it as a powerful retirement tool for investing in retirement funds in all sorts of different asset classes.

Why should you open one yourself? It may not be immediately obvious. So, let’s dissect the Self-Directed SEP IRA and address why this is one of the most under-utilized (yet powerful) tools for building a retirement portfolio.

Understanding how a Self-Directed SEP IRA Works

Of course, knowing that a SEP IRA exists is only half the battle. You also have to understand how it works—and why it my work for you—to put it to use. So, let’s dive in.

A Self-Directed SEP IRA is a retirement investment vehicle that allows you to put a lot of money away for retirement by building a retirement plan with your company. However, the Self-Directed SEP IRA is also popular with self-employed individuals with small companies because it’s so simple to set up. And through Self-Direction, you can use the funds you put aside in a SEP IRA to do all sorts of great things with a retirement portfolio, such as investing in real estate, precious metals, and many more alternative asset classes that might not be available through a traditional brokerage.

The Self-Directed SEP IRA also has some unique quirks. For example, while a Roth IRA has a set limit for how much investors can contribute to it each year, the SEP IRA’s contribution limits are more variable and may depend upon your net business income. You’ll want to consult with a tax professional to make sense of everything that goes into using a SEP IRA.

The Advantages of Using a Self-Directed SEP IRA

Let’s say you do take the tips in this article seriously and decide to start investing in a Self-Directed SEP IRA. What does that mean exactly? Well, you can use this account to immediately begin investing a larger amount of money, thanks to those higher contribution limits. This is one of the chief advantages of using a SEP IRA, after all, because it means that as an investor, you’ll be able to have more flexibility for what you do with your retirement assets.

This is particularly advantageous for people who invest in real estate assets, for example, because it means that there is more capital there to put to work.

Why a Self-Directed SEP IRA?

Here at American IRA, we spend a lot of time talking about the freedom possible with IRAs. However, that freedom usually comes with limited amounts of contributions. With a SEP IRA, you’ll have more potential contributions to put towards retirement, which can in turn give you more options for retirement investing. It’s a great way to take advantage of a larger income, and it means that as an investor, you’ll be able to do all sorts of great things with your retirement account.

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

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