Why People Love Their Self-Directed IRA

Self-directed retirement plans are not a new concept. In fact, they have been available since the 1970s but are becoming more popular as savvy investors discover their benefits. Over the past three years, the use of self-directed IRAs has increased at a steady pace—and financial experts expect their use to continue to rise in the future.

According to the Investment Company Institute, American retirement plan data reports a total of $146 billion (approximately 2% of total IRA funds) are invested in self-directed IRAs. Additionally, this data also shows a 21 percent increase in the use of self-directed plans from 2013 to 2015.

The Attraction of Self-Directed Retirement Plans

  • These retirement plans give you control over your investing funds.
  • You gain access to a whole new world of assets called alternative investments.
  • You capture the flexibility to choose your own assets based on things you know and understand.
  • Alternative investments have the potential to earn income at a faster pace than some traditional assets.
  • You can invest in what you know best, at your own pace—and maintain a comfortable level of sanity while doing so.
  • You have the ability to invest with small funds.

There are several different plans available to fit your retirement saving personality.

  • Traditional and Roth IRAs
  • Individual (or solo) 401(k) plans
  • Health savings accounts
  • Education savings accounts

There are also plenty of diverse alternative assets you can choose to help build a strong relationship (and grow income!) with your self-directed IRA.

  • Real estate
  • Private lending
  • Private equity
  • Hedge funds
  • Precious metals
  • Forex trading
  • and much more…

The premise behind a self-directed IRA is to invest in what you know best. But, that doesn’t mean you can’t learn about assets you’re unfamiliar with. In fact, you can become knowledgeable in many different areas in an effort to boost the diversity and increase the success in your retirement portfolio.

If you know a lot about investing in real estate, then you’ll probably have a few of these assets in your plan. But, if you’re interested in forex trading, timberland, and oil and gas rights, well, they aren’t out of your reach. Even if you think an alpaca farm might garner a good return on your investment—you can learn about the ins-and-outs of these assets and decide to purchase them with your IRA.

How to Get Involved with Self-Directed Investing

Once you determine which account structure is best for you, the account can be funded by making a contribution. You can also rollover or transfer funds from an existing retirement plan, such as an IRA or a 401(k).

As the saying goes, “I love you more today than I did yesterday,” and Advanta IRA finds this is true regarding the relationships people have with self-directed retirement plans. Our clients enjoy the freedom and control these accounts provide that allow them to take an active role in reaching their retirement goals. They appreciate the diverse opportunities that can be found in the vast world of alternative investments outside the typical stock, bond, and mutual fund.

Clients also appreciate the relationship they build with Advanta IRA. While we do not give investing advice, we do ensure that the administrative details of self-directed accounts are performed in compliance with IRS rules and regulations. Each client is assigned his or her own client services representative who assists them throughout the investing process.

Additionally, Advanta IRA offers free educational seminars and webinars to clients and others who want to learn about the aspects of self-directed investing. Visit our event calendar to find a seminar near you, or to register for an upcoming webinar.

If you have questions about this article and want to learn more about alternative investments in your self-directed IRA, call us at (800) 425-0653 or send us a message.

About Jack Callahan

Jack proudly earned his bachelor’s degree in finance and multinational business from Florida State University and his law degree from the University of Florida College of Law. He established Advanta IRA in 2003 and has steadily nurtured and grown the company and the team every year since. Prior to founding Advanta IRA, Jack delivered specialized counsel to real estate investors, small business owners, and real estate professionals on tax, legal and financial matters. As an industry expert, Jack is a frequent speaker on self-directed retirement plans. He is an accredited continuing education instructor for the Florida and Georgia Bar Associations, Florida and Georgia Real Estate Commissions, and The American Institute of Certified Public Accountants.