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All About Self Directed IRAs and More

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January 27, 2021

If there is one thing 2020 has taught us, it is that nothing is as certain as it was before. One of the biggest changes and fears many Americans have right now is their job security… and what comes next. With the political climate changing daily, many people are looking for somewhere safe to place their retirement funds. And where is that? In Self-Directed IRAs.

Daily, Americans are moving their money into self-directed IRAs because of the many benefits and investments options available to them. Additionally, being able to make the decision about their accounts give them comfort in knowing that they don't have to rely on a fluctuating stock market. Let's take a deeper look into why self-directed IRAs are so sought after.

What is a Self-Directed IRA?

Simply put, a self-directed IRA is a retirement account that lets you take control and invest in the broadest spectrum of assets, like real estate. Like normal IRAs, Self-Directed IRAs also have tax advantages that allow earnings to grow tax-deferred or tax-free and compounds over time, maximizing growth in the account. Additionally, certain IRAs allow you to reduce your taxable income by taking tax-deductions.

What makes it a little different is that a truly self-directed IRA is one that permits the account owner to invest their IRA in what they know best, free from the investment restrictions imposed by a more traditional brokerage style account. This allows you, the account owner, to choose from a wide range of investments, including those not traded on a stock exchange, with very few limits on what a self-directed IRA can invest in. Common investments include single family, multi-family, private loans, and investments into small business or private companies.

What are the Benefits of Self-Direction?

There are many benefits of using self-directed IRAs. Not only can you diversify your portfolio, moving beyond stocks, CDs, and mutual funds, but you can also have more control on the investments you choose. Unlike having a financial advisor that will trade and sell your stocks for you, when you have a Self-Directed IRA, you are truly getting to find the investment of your choosing. Everything is on your terms. And let's not forget about the tax savings these accounts offer to help you save and invest for your future.

When you truly self-direct your retirement account, you choose the investment. This allows you to invest in the things you know and understand, as opposed to things you may not be as familiar with. Not everyone understands the stock market – or is comfortable with its current state, anyway – so, having the opportunity to invest in private assets like real estate, is a much better option for some.

How do I get my funds into a self-directed IRA?

Getting funds into a self-directed IRA is easy and there are multiples ways to do so. You can roll over the funds from an old 401(k), transfer them from an existing IRA, or just make a yearly personal contribution. If you ever have questions about starting and funding a self-directed, our team of Certified IRA Specialists are always available to help you navigate through the world of Self-Directed IRA Investing. Feel free to give us a call, send us an email (iraspecialists@questtrust.com), or visit our educational resources for more information and ways to get started!

We encourage you to take the opportunity to schedule a complimentary consultation with our team! Make sure you're on the right track for 2021 and give an IRA Specialist a call today at 855.386.4727.

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