How to Select the Best Type of Self-Directed IRA

How to Select the Best Type of Self-Directed IRA

Self-Directed IRAs are often the best option for investors who want to invest in alternative assets and want to plan their own retirement. However, understanding Self-Directed IRAs can be difficult because there are many factors to consider when selecting the best type of Self-Directed IRA. With that in mind, let’s dig into what you’ll need to do to select the best type of Self-Directed IRA for your situation.

Understand the Types of Self-Directed IRAs

If you’re interested in having more control over the investments that are made with your retirement savings, a Self-Directed IRA could be an excellent option for you. However, it’s important to understand the different types of Self-Directed IRAs before making a decision about which one is right for you.

The two main types of Self-Directed IRAs that most people are familiar with are traditional IRAs and Roth IRAs. Both allow investors to invest their retirement funds into certain types of assets, but there are some key differences between the two that can help determine which type works best based on your current financial situation, such as pre-tax contributions (traditional IRAs) and post-tax contributions (Roth IRAs). You should also familiarize yourself with SEP IRAs and SIMPLE IRAs, especially if you are in business and want to build a retirement plan that works for you and your employees.

Understand the Limitations of Self-Directed IRAs

There are some limitations to Self-Directed IRAs. The most important ones to keep in mind are:

  • You cannot invest in life insurance or collectibles. This is because these types of investments are not allowed by the IRS as permissible investment options for IRAs.
  • You also cannot invest in a way that provides a personal benefit to you or a “disqualified person,” such as a spouse or family member.

Determine Whether a Self-Directed IRA Is Right for You

If you’re interested in investing in real estate, precious metals, or other alternative assets with a Self-Directed IRA, it’s essential to understand how they work and whether they are right for you.

To help you decide, here are some questions to ask yourself:

  • What kind of investment opportunities do I want?
  • Do I have enough money saved up for my retirement? If not, will a Self-Directed IRA help me?
  • Am I looking for better returns than traditional styles of investing offer? If so, do I have experience in an asset class like real estate that I can use when building a self-directed retirement portfolio?

Consider Which Custodian to Use for a Self-Directed IRA

Now that you know the different types of Self-Directed IRAs, it’s time to determine which type best suits your needs. You will want to select a custodian that offers the services and features you need. Here are some things to consider:


Reputation: Find out who manages your money by looking at their website and checking reviews on third-party websites like Yelp or Google Reviews.

Fees: Static or dynamic fees, for example, is one of the key considerations here.

By understanding Self-Directed IRAs and how they work, you can select the best type of Self-Directed IRA when weighing the different options.

Self-Directed IRAs are an excellent way to invest in real estate, stocks and bonds, and other alternative investments. They offer investors the ability to make their own investment decisions without having to go through the traditional hoops of working with a brokerage who may not offer you the same options you desire in your retirement. To learn more, be sure to give us at American IRA a call by dialing our number: 866-7500-IRA. We’ll be happy to talk to you about what we do.

Want more tips on choosing a Self-Directed IRA? Visit: What They Don’t Tell You About Choosing a Self-Directed IRA (