Self-directed IRA is a retirement plan that has been gaining quite some popularity over the past few years. This plan has existed for more than 30 years but makes up only 1% of the six-trillion-dollar retirement market. However, over the past few years, the growth rate has exploded at 25% annually. The reason for the small share of the self-directed IRA funds in the retirement market is a not so well known IRS code, 4975, which acts as the basis which has motivated self-directed IRA account holders to go this way.
There are many reasons why the self-directed IRA is preferred over the traditional 401(k) by investors. Listed below are a few of those reasons.
1. You have the option of having direct access to your funds in your self-directed IRA. This means that you do not have to hire a custodian to conduct transactions on your behalf. This is particularly useful for one-the-spot and time-sensitive investment opportunities.
2. You can invest in whatever you like, from gold bullion to real estate to businesses that you can control. Unlike most of the other retirement plans, you can look beyond investment in stocks, bonds and mutual funds.
3. You can use commodities to keep your wealth protected from the frequent market fluctuations that we see today.
4. If you already have a retirement plan like a Roth IRA, or a 401(k), you can transfer those funds to a self-directed IRA and you will not be charged a single cent for this rollover. Also, you will not need to sell any of the assets that you currently have control of.
If you are a self-directed IRA account holder, you can invest in any area that you have some knowledge about. For example, if you know a thing or two about the real estate market, you can put that knowledge to good use and increase your returns.
To learn more about, Top 5 reasons why you should start a self-directed IRA: Click Here
Why a self-directed IRA is better than a 401(k)
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