When you write a check, the hardest thing to do is to tear it out of the checkbook with an even crease. Really. That’s because the checkbook is immediate, the checkbook is convenient, and the checkbook is flexible. So it’s no wonder that Self-Directed IRA investors love it so much when they can use their checkbook to make retirement investment purchases within their tax-protected account. The power of the checkbook gives you freedom unlike any other style of investing—and that’s worth pursuing.

But how does it work? And what are the benefits? Let’s look at the impact of checkbook control when you use a Self-Directed IRA.

How to Achieve Checkbook Control in a Self-Directed IRA

Checkbook control might sound like a fancy-schmancy bit of legal maneuvering, but the concept is actually quite simple. You just need a couple of elements:

• Your Self-Directed IRA. A Self-Directed IRA is a retirement account, just like any other, except for one thing: you work with a custodian like American IRA for more independence in the retirement investments you choose. Rather than working with a traditional broker, you’re free to buy/sell a wider range of retirement investment types.
• A Single Member LLC. Since your IRA can now own different types of assets, one of those assets is a Single Member LLC. With that LLC in your IRA—and your LLC capable of having its own checkbook—you start to see how the mechanics work. The LLC holds the checkbook, your IRA holds the LLC, and you hold the IRA. The ultimate control over that checkbook therefore lands on you.

So yes, it’s really that simple. But the beauty of this style of investing is that you can use this arrangement to invest in a wide range of retirement assets. But that still leaves one question: why is this such a gamechanging way to approach retirement?

The Benefits of Checkbook Control in Your Self-Directed IRA

More control means more power. But let’s get more specific. What are the reasons investors might go through the initial setup of an LLC within an IRA to make their retirement investing look like this? Here are some of our favorite benefits:

• Speed and flexibility: Traditional Self-Directed IRAs require you to go through a custodian to make each investment, which can be time-consuming. With checkbook control, you can act quickly on investment opportunities, as you have immediate access to your funds.
• Reduced fees: Many Self-Directed IRA custodians charge fees for each transaction. By using an LLC with checkbook control, you can potentially reduce these fees. After all, you’re now handling transactions yourself.
• More investment choices: Checkbook control gives you the freedom to invest in a wide array of assets without restrictions imposed by custodians. This includes less common investments like private real estate, precious metals, or even certain types of business ventures.
• Increased control: Managing your investments through an LLC allows for greater oversight and decision-making power. You don’t need to wait for a custodian to approve your transactions or worry about delays.
• Simplicity in record keeping: With your own LLC, you can manage accounting and record-keeping more efficiently. This centralized approach simplifies tracking and reporting for tax purposes. It’s easier to reference the transactions within your account to help verify that they were, in fact, retirement transactions.

If it all sounds too complex, remember that you can have a Self-Directed IRA administration firm in your corner, helping you establish the account. It’s really that easy—and that beneficial. For more information, why not reach out to American IRA today? Just call us at 866-7500-IRA.