Before Your Self-Directed IRA:

Self-Directed Traditional IRAs, Roth IRAs, SEP IRAs… the list goes on. By the time you learn all of the options you have at your disposal, it’s easy to feel like your head is spinning. But one of the key decisions to make as you consider your Self-Directed retirement journey is simple: which type of Self-Directed IRA account is right for you? It’s a lot to think about. That’s why we’ve compiled a list of questions you’ll want to consider before you open your account with a Self-Directed IRA administration firm like American IRA. Let’s explore some of those questions now.

What Are Your Self-Directed IRA Investment Goals?

Before diving into the world of Self-Directed IRAs, you need to know what you’re in it for. What do you want your life to look like three decades from now? It can seem like a silly question, especially when you’re young, but that time will fly by. Are you looking for long-term growth? Income generation? Diversification? Your investment goals will shape the types of assets you consider for your Self-Directed IRA. Whether you’re interested in real estate, precious metals, private equity, or other alternative investments, aligning your IRA with your goals should be the first answer to these questions.

How Much Risk are You Comfortable With?

Investing always involves risk. Self-Directed IRAs are no exception. Different assets carry varying levels of risk, after all. While some investments may offer potentially higher returns, they often come with increased volatility. On the other hand, less risky investments may provide stability but could yield lower returns. Understanding your risk tolerance can help you select the right mix of assets for your Self-Directed IRA portfolio. And the way you take on risks can help determine if you want a before-tax solution or an after-tax account, like a Roth IRA.

What are the Costs of Setting Up Each Account?

Like any financial decision, you’ll want to weigh the costs associated with Self-Directed IRAs. These can include account setup fees, transaction fees, asset holding fees, and ongoing administration fees. True: Self-Directed IRAs offer flexibility. But they can also come with additional costs if you don’t know what you want to do and end up having to make costly administrative decisions down the line. That’s why you’ll want to know where the costs are before you get started.

What is Your Knowledge and Expertise?

Self-Directed IRAs offer a wide range of investment opportunities, but they also require a level of knowledge and expertise—after all, you’re the one making the decisions in this case. Whether you’re investing in real estate, private equity, or tax liens, you’ll have to understand the risks and complexities associated with each asset class. If you’re considering investments outside of your area of expertise, consult with a financial advisor or other professionals who can provide guidance.

These answers will only hint at which direction you should take. To get more specific guidance, consult a tax advisor or financial advisor for their specific guidance on your goals. But there’s good news: a Self-Directed IRA can be a smart move for investors looking to take control of their retirement savings and explore alternative investments. Simply making this move can yield all sorts of great things for you down the line.

But before you do, ask the right questions and thoroughly evaluate your options before making a decision. If you’re ready to learn more about Self-Directed IRAs and how they can benefit you, contact American IRA at 866-7500-IRA to find out how we can help speed the process along by getting you set up with your very first Self-Directed IRA.