Why Do Investors Choose Self-Directed IRAs?

A Self-Directed IRA is an approach to retirement that offers investors more freedom and flexibility to choose what goes into their retirement account. Yet is that all there is to the equation of why investors choose Self-Directed IRAs? Why not go for a more traditional approach with a big-name broker? In this article, we’ll break down why investors like Self-Directed IRAs, some of the most common benefits to investing this way, and how you can explore a Self-Directed IRA for your own retirement strategy.

Why Investors Choose Self-Directed IRAs

Why choose a Self-Directed IRA? The reasons are multiple. For starters, Self-Directed IRAs offer investors a degree of flexibility that simply isn’t there when investing with a traditional brokerage firm. For example, an IRA that comes through an employee-sponsored plan typically limits its offerings to a select group of funds. This might be good for investors who only want to choose the best possible fund and move on with their lives. But not everyone feels constrained to that style of investing.

Working with a Self-Directed IRA custodian, however, means investors can access the full range of what it is that retirement accounts offer. And the IRS allows retirement accounts to hold certain precious metal assets, real estate assets, tax liens, private company stock, and more. For investors who want to diversify beyond the traditional stocks-and-bonds approach, a Self-Directed IRA isn’t just a nice option. It’s often a necessity.

Self-Directed IRAs offer that flexibility as well as additional control. Consider the arrangement you might make with a Self-Directed IRA firm, in which they administer the account and you issue the buy and sell orders. If you’re the one calling the shots, you can completely customize your retirement investment experience as you see fit. It’s still a good idea to work with accountants and financial advisors, but the central theme here is simple: you’re the one in control.

On top of it all, Self-Directed IRAs still offer you the tax benefits of retirement investing, as long as your retirement assets still fall within the rules. If you select smart investments that fit your objectives and goals, you’ll be able to exercise more freedom and control over your retirement accounts than you ever might have imagined possible.

How to Use a Self-Directed IRA

Once you’ve decided that the benefits listed above are the right choices for you, the next step is simple: setting up a Self-Directed IRA of your own. This might sound like a complicated bit of financial maneuvering, but as long as you work with a Self-Directed IRA administration firm you trust, the rest falls into line. Simply fill out the forms for a Self-Directed IRA with that firm. Choose how you’re going to fund that IRA—such as through a transfer (if you already have a similar account with a different firm), or through direct contributions or a rollover. Make sure you’re working with a Self-Directed IRA administration firm with a proven track record of offering services to clients like yours.

From there, you’ll be able to get started with a method of investing that may change your approach to retirement. With the possibility of using a variety of asset classes in your portfolio, you’re in charge. You simply have to stick to the rules that apply to every retirement account, do due diligence on your potential investments, and remember that your strategy is one that should last you a lifetime. If you’re interested in finding out more about how Self-Directed IRAs work, we encourage you to reach out to us here at American IRA by dialing 866-7500-IRA.