You may have heard that anyone investing for retirement needs an IRA. And it’s true: the tax benefits of investing in a retirement account are many. But what about when you add the phrase ‘Self-Directed’ to that IRA? What changes then? What kinds of new benefits can investors access? Even if it sounds complicated, a Self-Directed IRA is a way of approaching your retirement account that gives you more freedom and flexibility in the investments you choose. But let’s explore what this means. What can a Self-Directed IRA give you, and how can you make the most of it?

Using a Self-Directed IRA to Achieve Diversification Beyond Traditional Assets 

One of the key advantages of a Self-Directed IRA? They allow you to invest in a wider range of assets beyond the traditional options like stocks, bonds, and mutual funds. Think of it as a choose-your-own-adventure story. Rather than walk the path that brokerages would choose for you, you can pick the investments you want to hold in your IRA.

Which specifically? With a Self-Directed IRA, you can venture into alternative investments such as real estate, precious metals, private equity, and even cryptocurrencies. This allows you to diversify your retirement portfolio beyond what’s typically available in conventional IRAs. By spreading your investments across a few asset classes, you can potentially reduce your risk as well—or you can go all-in on your favorite asset class. Again: it’s a choose-your-own-adventure story.

Taking Control of Your Investments, What to Allow

With a Self-Directed IRA, you won’t be limited to the investment choices offered by a traditional IRA brokerage. Instead, you have the autonomy to direct your funds into investments as you see fit. D you have a keen interest in real estate, startups, or other alternative assets? Go ahead and invest in them if you want. In short, a Self-Directed IRA empowers you to take control of your investment decisions. This autonomy can be particularly favorable for investors who prefer a hands-on approach.

Tax Advantages and Retirement Planning

Just as with an IRA, Self-Directed IRAs offer tax advantages that can help you maximize your retirement savings. Contributions to a Self-Directed IRA may be tax-deductible, depending on the account you choose. This can also depend on your income level and filing status. Additionally, the earnings generated within the account grow tax-deferred, allowing your investments to compound over time.

Let’s say you opt for a Roth Self-Directed IRA. In this case, qualified distributions in retirement are tax-free, providing you with potentially significant tax savings in the long run. By leveraging these tax benefits, you can optimize your retirement planning in all the familiar ways. The fact that you’re investing in alternative asset classes won’t change that.

Exploring Investment Opportunities

The flexibility that a Self-Directed IRA allow opens the door to opportunities that may not be available through traditional retirement accounts. Whether you’re interested in purchasing rental properties, investing in private companies, or diversifying with precious metals, a Self-Directed IRA can be the perfect vehicle. You’ll be able to tailor your own strategy in a way that includes alternative asset classes that don’t show up in traditional brokerage accounts.

A Self-Directed IRA offers investors the freedom, flexibility, and control to shape their retirement savings according to their preferences and experience. Do you have a lot of experience in real estate? You can use that experience as you see fit. Do you want to use precious metals in your retirement account? You can do that, too. It’s all about what you choose. To learn more about how a Self-Directed IRA can benefit you, call 866-7500-IRA today.

Want more care tips for your Self-Directed IRA? Visit: What are the “Other” Investments are Allowed in a Self-Directed IRA? (americanira.com)