Looking around at the retirement investing options, but don’t see one you like? You might be in the market for a Checkbook IRA. In a Checkbook IRA, you use a Self-Directed IRA to hold a Single Member LLC. And the checkbook of that Single Member LLC essentially becomes your IRA’s checkbook, ready to make fast and flexible investments in retirement assets.

We know what you’re thinking: if it’s such a great arrangement, the process must bury you in fees. And the truth? Fees do exist. But they’re largely upfront. The benefit of investing through a Checkbook IRA is that it offers you long-term peace of mind because you don’t have to worry so much about fees for maintenance. Instead, you can simply make the investments as you please.

But that still means you’ll have fees upfront. So here’s what investors will have to know about Checkbook IRA fees and how they work before getting started.

Checkbook IRA Fees Are Mostly Upfront

A Checkbook IRA is a simple arrangement in which your Self-Directed IRA houses an LLC. And through that LLC, you can make the quick checkbook investments that keep your retirement account flexible. So it stands to reason that if you’re going to establish this type of account, the fees are mostly going to be upfront. You’ve got some paperwork to do at the outset to make sure that your account is established the right way—and within the legal rules for how your retirement account should be structured.

The key here? LLC fees.

Your LLC formation fees can vary, depending on the complexity of your business and the state in which you’re forming them. But expect them to run you over $200 for filing and preparation. Remember that these fees cover a number of items, such as:

• Drafting the LLC operating agreement
• State registration
• Obtaining an EIN from the IRS

With these fees paid and the paperwork filed, you’ll have a Single Member LLC ready to go. And this is what gives you the ability to open a bank account for that business, which is what gives you the ability to hold your Checkbook IRA. Just remember that your IRA will be the Single Member of this LLC, its owner. From there, you’re ready to begin.

What About Annual Checkbook IRA Fees?

Your Self-Directed IRA custodian will generally charge you less fees down the line if there’s not much maintenance to perform on an account. You may have an annual fee for account administration and compliance, which can often run clients anywhere from $100 to several hundred dollars per year. You should also expect that your LLC may incur annual state fees for maintaining its registration with the state you’re in. Those will vary by state, so we can’t tell you how much to expect exactly.

The good news? These upfront fees are generally easy to handle, not too expensive for most retirement investors, and are relatively low compared to other fees you might incur if you’re an active investor. That’s because once you have an LLC within your Self-Directed IRA, there’s not much administration to do from the custodian’s point of view. You’re the one handling your investments, which means you’re handling the writing of the checks and making the purchases.

Is this what you had in mind for a long-term way to invest in retirement? Maybe it’s time for you to consider a Self-Directed Checkbook IRA. Checkbook IRA fees might not be as exorbitant as you thought—and the benefits are countless. To start one of your own, reach out to us here at American IRA by dialing 866-7500-IRA.