Why Haven’t I Heard of Self-Directed IRAs?
Asking yourself “Why haven’t I heard of self-directed IRAs before?” is a great question. Self-directed IRAs have been available since 1974 and provide tax-advantaged retirement savings just like conventional IRAs.
So, why haven’t you heard of self-directed IRAs before?
There are two main reasons. First, only 3-5 percent of retirement accounts are self-directed. Self-direction is a little-known, but growing strategy among savvy investors. Also, you’re more familiar with IRAs housed with mainstream banks, brokerages, and other financial institutions—and they prefer to limit the assets in their plans to offerings they sell or promote and often make commission on. They have no reason (or incentive) to introduce you to investments beyond their own, or to explain the powerful potential self-directed IRAs offer.
Self-directed IRA owners do not need a third-party advisor to choose investments for them. They also have the freedom to invest assets that aren’t available for regular IRAs. This type of investing gives the account owner total control—which is not what you get with mainstream IRA custodians.
2 benefits a self-directed IRA has that a regular IRA does not:
- Self-directed IRA owners choose their own assets.
- Self-directed IRAs can hold alternative investments that are not allowed in regular IRAs.
The edge self-directed plans have over conventional plans is significant.
Check out this video to learn more.
Investment opportunities for regular IRAs vs. self-directed IRAs
Regular IRAs are typically limited to:
- Mutual funds
- Hedge funds
Self-directed IRAs can invest in almost anything:
- Real estate (single and multifamily homes, rentals and rehabs, tax liens and deeds)
- Cryptocurrency (Bitcoin, Litecoin, Ethereum)
- Gold and other precious metals
- Private equity, startups, crowdfunding, hedge funds
- Futures and forex trading
- Improved and unimproved land
- Private lending opportunities
- And much more…
Self-directed IRAs allow people to invest in alternative investments to the stock market. As more and more people grow weary of the erratic behavior of the market, they look to this asset class to acquire diversity in options that have the potential to build significant retirement wealth in their portfolios.
The ability to invest in just about anything you can think of may indeed make you rethink your conventional IRA. At the very least, you may decide to divert some or all of your future retirement savings into a self-directed plan instead of into a regular IRA.
Additional Facts About Self-Directed IRAs
- You can self-direct traditional, Roth, SEP, and SIMPLE IRAs. Solo 401(k)s, HSAs, and ESAs can also be self-directed.
- Qualified plans like a 401(k), 457(b), or 401(b) from a previous employer can be rolled into a self-directed IRA.
- You can gain checkbook control of your IRA funds when you set up an IRA LLC. This allows you to invest quickly—ahead of the competition—by writing a check for investments directly from your IRA funds.
- Your IRA can use a non-recourse loan to leverage its investing power and acquire more lucrative assets.
- You can partner your personal funds with your IRA funds to invest. You can also partner your IRA funds with another IRA’s funds to invest.
Why Work with Advanta IRA?
Advanta IRA is a self-directed IRA administrator serving clients across the nation. We do not sell investments, and we do not make commission on assets in the accounts we administrate. We do allow our clients to invest in every alternative asset available and permissible by the IRS. And, with almost $2 billion in client assets under management—we have the experience and knowledge in our industry that you deserve when investing your hard-earned savings. Our concierge-level service is superior, allowing you to work with a single account representative throughout your investing processes. Our services allow you to invest in what you know best with confidence and ease to secure the retirement future you desire.