We are all worried about our post-retirement years. We don’t know whether we will have the money to go on that dream vacation that we plan for all our lives. We don’t know whether we will even have someone to look after us in case we start losing it. Thankfully, there are a few ways by which we can ensure that we spend our golden years in comfort. Retirement accounts are made for people who want to save up money all their working lives so that they have some serious cash by the time they retire. But there are plenty of options available and it is hard to decide which retirement account to go for. Here are three facts about self-directed IRAs and they should help you decide which account to get.
1. You can invest in real estate
Did you know that it is not only possible, but actually encouraged by the Internal Revenue Service (IRS) to invest in real estate using a retirement account? Using a self-directed IRA, you have plenty of options for investment and you can really look beyond the stocks, bonds and mutual funds that only return you a small margin of profit. There are plenty of advantages of a self-directed IRA, but it is hard to find a firm that offers a truly self-directed IRA. Many firms will just give you checkbook control and not allow you to invest in anything other than the traditional assets, so you will really have to search for the right broker for yourself to be able to invest in real estate.
2. You are allowed to use private lenders
If you have bought a lot of real estate and emptied your own self-directed IRA or have reached the upper limit, you don’t have to stop. You can continue investing and earning profits by borrowing money from private lenders and putting it into your self-directed IRA. You can pay them some interest from the profit you make and it is a win-win situation for both you and the lender. Using the money of private lenders, you can make an unlimited number of deals for an unlimited amount of money.
3. You have “checkbook control”
Even though you will not have physical custody of your money in a self-directed IRA, you will have full control with the help of a checkbook. Unlike other retirement plans, you wouldn’t have to call up your custodian or broker and ask them to approve a payment that they want to make. You can use your own decision-making skills and pay whomever you want for the purposes of investment. An added bonus of this feature is that you wouldn’t have to pay transaction fees either.
After knowing these facts about self-directed IRAs, it is important to remember that you should be careful before handing your money over to a custodian. You would want to make sure that they are qualified for the job. Don’t hesitate to contact the relevant authorities in your state for information.
Learn more about: The Difference between a Traditional and Self Directed IRA, Click Here
3 Incredible, yet true facts about self-directed IRAs
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