Are you a fan of do-it-yourself projects? Do you like to maintain a bit of control over the things you can in life? Did you know you can take control of your retirement funds and investing decisions? Well, you can if you use a self-directed IRA, which is the ultimate do-it-yourself retirement plan.
If you are a true do-it-yourselfer, you probably have several traits: You enjoy learning new things. You like to put your knowledge to work. You take pride in the projects you take on—and because you are personally involved in determining the outcome, you strive to do your best.
If you prefer a hands-on approach and the control that allows, you’ll be happy to know you can apply the same attributes to your retirement planning strategy by using self-directed IRAs.
What Is a Self-Directed IRA?
Self-directed retirement plans are gaining popularity among individuals who want to be actively involved in planning their retirement. In the world of self-direction, this means plan owners have control over their retirement funds. They do not rely on a third party to choose assets for them. They are able to pick and choose which investments they want to add to their portfolios, based on their own knowledge and expertise.
This allows an incredible amount of freedom across the board and the opportunity to truly diversify your retirement portfolio by investing in alternative assets. Your understanding and experience in the ins-and-outs of your choices can increase your odds for success. You can put your knowledge to work and choose assets that you can personally track, measure, and thoroughly evaluate.
The typical retirement plan custodian limits you to assets they sell, like stocks, bonds, and mutual funds. Many people are okay with someone else making these decisions for them. However, many people also prefer to control their own destinies. Self-directed plan custodians, like Advanta IRA, allow you this freedom—and the ability to invest in every alternative asset that is permissible in self-directed IRAs.
If you know something about real estate—you can invest in residential or commercial rentals, rehabs, or land. Your IRA can own a business, participate in private lending investments, and acquire private equity options. If you’re into farming your account can build income from things like raising cattle and chickens, breeding Arabian horses, or owning an alpaca farm. Do you have a flair for business development, technology, or inventing things? Well, your self-directed IRA can earn income on investments in those realms, too.
Of course, just because you are in charge—doesn’t mean you can’t draw on the knowledge of others. Always consult professionals such as your CPA, realtor, or financial advisor to help if that’s what you need. Having trusted resources in your arsenal such as these people increases the advantage you gain when you choose to do it yourself—and they can help you perform transactions in compliance with industry regulations.
Doing Your Due Diligence
The ultimate do-it-yourself retirement plan does come with some responsibility. Doing it yourself also means doing your due diligence—and this critical responsibility falls solely on your shoulders. It’s up to you to fully research and investigate the assets you’re considering to avoid fraud and to ensure they are viable acquisitions.
You’re also responsible for avoiding prohibited transactions and dealings with disqualified persons. You must operate within IRS rules and regulations to maintain your self-directed IRA’s tax-sheltered status.
The idea is to invest in what you know best. Advanta IRA believes there is no one more qualified than you to make these critical investing decisions for you. The more familiar you are with the assets you choose, the better your chances for success.
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