5 Things You Need to know about Self-Directed IRAs

It doesn’t matter what retirement plan you decide is the best for you, whether it is a 401(k) or a self-directed IRA, you need to know the merits and demerits of each one so you can be satisfied with your decision. The self-directed IRA is one of the fastest growing retirement plans and there are plenty of reasons for it too. But that does not mean that you don’t have to be careful before opening a self-directed IRA account. Listed below are a few things that you should know about the self-directed IRA.

1. You can purchase almost anything using a self-directed IRA account. With the more traditional retirement accounts, your options are limited as you can only invest in stocks, bonds and mutual funds. With a self-directed IRA, you can take your pick from gold bullion, real estate, a small business, or pretty much anything. The only prohibitions are life insurance contracts and collectibles.

2. Almost anyone is eligible for the opening of a self-directed IRA account. There is no age or income limit (upper or lower).

3. You are allowed to make investments without any lower limits to your account balance. This means that you just have to make sure you have enough money in your account for the investment you want to make. You don’t have to worry about keeping a minimum balance to keep your account alive.

4. The income and profits generated in a self-directed IRA are tax-exempt until a distribution is taken.

5. You are the only custodian of the funds in your self-directed IRA account. So unlike most of the other retirement plans out there, you have “checkbook control” of your money and conduct transactions as and when you want. You will not have to wait for someone to pick up their phone just to authorize a time-sensitive transaction.

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5 Things You Need to know about Self-Directed IRAs