It is very common for individuals to seek for ways to save for retirement outside of their employment
. The most popular method being used currently is the self directed IRA. This IRA is great for investors because it gives them the control over their portfolio.
Having control over their portfolio is a big deal to some people. They like that it gives them the option of making it diverse. Portfolios that are diverse tend to be more successful.
The most general benefit is that the portfolio will more than likely always be growing. This is because if one market is down, then another is probably growing. This is a good way to insure that the IRA will always be growing.
A growing investment option is real estate. It is hard to invest in real estate for a retirement option because the self directed IRA is almost the only one that allows it. There are various ways that individuals can use the real estate option.
An investor can purchase a home that is a fixer upper. They can renovate it and turn around and resell it for a profit. The entire profit is not taxable because it is considered a gain in the IRA and it stays in it and continues to grow.
A second way is to buy apartment complexes. The rent from the apartment would be a gain in the self directed IRA. Investors can decide to have outside companies manage the apartments so that they do not have to.
Other examples in real estate options are undeveloped lots and beach or vacation houses. All of the real estate options are best to be bought with cash from the IRA. It might be possible to get a mortgage in the name of the IRA, but the interest will decrease the profit on the real estate.
Custodians are used to help investors manage the IRA through paperwork and regulations. They can also offer advice, but they have to do what the investors ask. Custodians are great tools to keep self directed IRAs safe and protected from unwanted fees.