Self-Directing your IRA is a powerful retirement strategy that opens up all sorts of possibilities. Opening a Roth IRA is a powerful retirement tool that, once again, opens up all sorts of possibilities. Using Checkbook Control with an LLC in your retirement account is a powerful retirement tool that…okay, you get the point. But what happens if you combine all three strategies into one powerful approach to retirement? It’s known as a Self-Directed Roth IRA LLC, and you’d be amazed what it can do.

Understanding What a Self-Directed Roth IRA Is—and How It Can Help You

Let’s start by defining the Self-Directed Roth IRA. A Self-Directed Roth IRA provides tax-free growth and withdrawals on investments made with after-tax dollars. This means all sorts of advantages can come your way. And unlike the traditional brokerage approach to Roth IRAs, a Self-Directed Roth IRA allows for a broader range of investments. You’re not limited to stocks and bonds. You can start investing in real estate, precious metals, and private equity.

And yes, that includes investing in LLCs, including an LLC set up for the purposes of retirement investing. Adding an LLC structure to this type of IRA enhances your flexibility and control over your investments thanks to checkbook control. This means you can make investment decisions and execute transactions directly, without requiring custodian approval. You simply write a check from the LLC’s checkbook, because you, as the IRA owner, ultimately have that control.

Why bother? When you have checkbook control within a retirement account, it gives you the flexibility and speed of investing on your terms. Yes, you’ll still have to follow the basic rules of retirement investing, but you’ll also be able to use the checkbook to make retirement transactions without custodial approval. If you spot an opportunity for retirement investment and need to make it in a hurry, the checkbook control will come in handy.

Why a Roth IRA?

Because they use after-tax money, Roth IRAs don’t have the same obligations as Traditional IRAs. In other words, you pay the taxes on your Roth IRAs upfront by funding them with money that’s already been taxed. And because you don’t deduct these contributions from your taxable income, the Roth IRA offers all sorts of options. For example, you can withdraw contributions (but not the growth) from a Roth IRA with more flexibility than you would a Traditional IRA.

This opens up all sorts of possibilities with retirement investing. With a Roth IRA, you don’t feel like your funds are permanently out of reach, always subject to heavy penalties. And when you have the LLC within the Roth IRA, you extend the flexibility of the account, which means you have more freedom to choose your own destiny. We often like to call Self-Directed IRA investing a “choose-your-own-adventure” story. There may be no better example of that approach than using an LLC within a Roth IRA to their maximum potential.

Of course, it always helps to have a great Self-Directed IRA administration firm in your corner—a team that can help you with the setup for this structure, get you started off on the right foot, and help with the paperwork. That will give you more confidence as an investor, which is especially important if you plan on exercising more freedom with your retirement funds. Want to kick it all off the right way? Now’s the time to reach out to the helpful team at American IRA. Just reach out to us at 866-7500-IRA to find out more.