subject: What Is A Self Directed Ira? [print this page] Whether youre a seasoned investor or a newbie, you need to make yourself aware of the options available to you with a self directed ira, or SDIRA. A self directed ira is a powerful alternative to both traditional IRAs and Roth IRAs offering financial control over your own retirement funds.
What to Consider When Choosing a Self Directed IRA?
My suggestion is that you first have a good talk with yourself about being a hands on investor, or if youd rather let your broker tend your nest and charge you fees to do this. If youd like to get higher returns and you can handle the day to day decisions, you should look into setting up as self directed ira.
What is a Self Directed IRA?
Self-Directed simply means that your funds are taken out of the brokers account and placed into a new account that is designated specifically for you to use for investing. You can place new funds or transfer from your existing portfolio into your new self directed ira. You make the choices about the investment vehicle.
If you have been disappointed with the lack-luster returns in your current IRA account, and are tired of getting charged fees for little or no return, its time for you to take control of your own retirement and become your own investment bank through a self directed ira. Currently there is an estimated 3 trillion plus dollars invested in stocks, bonds, mutual funds, and cds with tax deferred accounts known as IRAs. Less than 3% of investment money is taking advantage of the investment potential of a self directed ira. The self directed ira has been available since 1974. It is a viable and legal option that allows you to use tax-deferred or tax-free money to invest and to become your own bank.
How Does a Self Directed IRA Work?
With a self directed ira you will have a checkbook, a debit card and all the tools that come along with a business checking account. All you need to know are the few things you cannot do, the rest is up to your imagination. Basically a self directed ira is a unique hybrid tool that utilizes a self-directed custodian and a specialized legal structure. It is a vehicle that eliminates red tape and most importantly the continuous fees traditional investment firms are charging you right now!
Your current retirement account can be moved to a self-directed custodian who allows alternative investment vehicles that pass their compliance and IRS scrutiny. To do this, it is highly advised you utilize an expert with experience in setting up and customizing your self directed ira. So heres the simple step-by-step approach:
1.Your retirement account is moved to a self-directed custodian.
2.A legal and accounting team creates a customized LLC and submits to the custodian.
3.You open a business checking account for the self directed ira
4.You submit an authorization form to the custodian instructing them to fund your new bank account.
Once this is done you will have absolute control over your new self directed and you can direct your investing efforts. This could be in the form of business seed capital, real estate investing, tax lien certificates, and the traditional stocks, bonds, and mutual funds.
The real beauty of this vehicle is that you can leverage yourself into a bigger investment with the potential for much higher rates of return. I love the idea of using the other guys money to grow my own investments and having the added benefit of additional tax deductions.
If you qualify, a Self-Directed Roth IRA is even better because the earnings are tax-free at distribution compared to the traditional IRA. You could have almost no tax on unlimited earnings!
It is your job and your right to take control of your own retirement and become your own bank. There is a revolution going right now, today. Be part of that revolution and take control of your future from Wall Street and put it back in your hands. Its time to get a self directed ira and take control of your own financial destiny.
