A Self-Directed IRA (SDIRA) is just how it sounds: an IRA in which you keep more control for yourself. This makes things interesting for investors. Rather than focusing only on the stocks and bonds that your broker offers, you can broaden your investment horizons. You can invest in real estate, precious metals, and yes, even private companies. And that’s where the LLC comes in. Using an LLC within an SDIRA means you can potentially give yourself “checkbook control,” or the ability to make retirement investments with the signing of a check. Curious how it works? Here’s what you’ll need to know.

What is an SDIRA LLC?

An SDIRA LLC, or Self-Directed IRA Limited Liability Company, is a structure combining the benefits of a Self-Directed IRA with the flexibility and control of an LLC. Here’s a breakdown of its key components:

• The Self-Directed IRA: A Self-Directed IRA puts more direct control in the investor’s pockets. You can invest in a broader range of assets than with the traditional approach. Think real estate, precious metals, private equity, and more. With an SDIRA, you have the freedom to direct your investments. The catch? You typically need to go through a custodian for transaction approvals.
• The Limited Liability Company (LLC): An LLC is a simple business structure that provides personal liability protection and flexibility in management. In the context of an SDIRA, you’ll set up the LLC as a Single Member LLC to hold the assets of your Self-Directed IRA.
• Combining the Two for Checkbook Control: The SDIRA LLC structure involves setting up an LLC where your Self-Directed IRA is the sole member. You, as the IRA owner, act as the manager of the LLC. Now you’ll have checkbook control over your investments. This means you can make investment decisions and execute transactions directly, without needing custodian approval for each move.

How Does an SDIRA LLC Work?

First, set up the Self-Directed IRA by working with a Self-Directed IRA administration firm. To set up an SDIRA LLC, you first need to establish a Self-Directed IRA with a custodian that offers this option in the first place, like American IRA. Once the IRA is in place, you’ll create an LLC and have your IRA fund 100% of the LLC’s membership. The LLC will then open a bank account. It’s this bank account that ends up giving you the checkbook control.

Once properly established, you can use the funds in your LLC’s bank account to invest in various assets. Like with any Self-Directed IRA, you’re now able to invest in a wide range of options like real estate and precious metals. The key advantage of the SDIRA LLC arrangement? Your ability to act quickly on investment opportunities without waiting for custodian approvals.

The Benefits of SDIRA LLC Investing

One of the primary benefits of an SDIRA LLC is the increased control you have over your investments. You can make decisions and execute transactions with the click of a button or a quick phone call, bypassing the need for custodian approval.

Traditional SDIRAs often require approval from the custodian for each transaction, which can be time-consuming. With an SDIRA LLC, you can manage transactions quickly. Did you notice an opportunity popping up? Then you can jump on that opportunity in a hurry thanks to checkbook control.

This is just a taste of the benefits of Checkbook Control investing. In your retirement, flexibility and freedom can be paramount. And for many investors, true freedom comes with the freedom of holding the checkbook. Want to know more? Reach out to us here at American IRA by dialing 866-7500-IRA today.