Did you know you could invest in Real Estate using your retirement funds with Guardrail Finance?
With Self-Directed IRAs (SDIRAs), you can.
Keep reading to learn how you can leverage your retirement savings to invest in what you know and believe in.
What is a Self-Directed IRA?
A Self-Directed IRA (SDIRA) is quite simply, an IRA. All IRAs abide by the same laws and possess the same capabilities. Unlike other IRAs held at banks, brokerage firms and other institutions, with an SDIRA, you’re not limited to stocks, bonds, or mutual funds.
Though SDIRAs have been around since the 1980’s, few investors make use of the opportunity they create. In fact, only 3-5 percent of retirement accounts are self-directed. You’ve likely never heard of SDIRAs because they aren’t generally offered by banks or brokerage firms – and these types of entities would prefer to keep you investing in the assets that they offer; and profit from.
What are the benefits of investing with an SDIRA?
An SDIRA gives you the power to build a more diversified and resilient portfolio. It allows you to take advantage of alternative investments such as real estate, precious metals, private equity, notes, and more. A custodian/administrator is required to do the recordkeeping for the assets in your account, but nothing moves in or out of it without your direction. You decide how much, when, and most of all, what to invest in, giving you the freedom to invest in what you know best.
Put simply, with an SDIRA, you can combine your expertise with your retirement savings to invest smarter and create a portfolio that works harder for you.
Investing using an SDIRA also opens the door to building your savings in a tax-advantaged account. With a traditional or Roth SDIRA, you have the potential for tax-deferred or tax-free growth that can significantly affect future wealth positively.
What should I know about investing with an SDIRA?
With total control comes increased responsibility. Your SDIRA provider isn’t going to vet your investments so doing your own due diligence is crucial. There are also a few key rules that you must follow in order to keep your account in good standing:
- Your investments cannot directly benefit any disqualified persons. These include you, your spouse, your lineal ascendants or descendants, an IRA beneficiary, or anyone providing services to your SDIRA, to name a few.
- Avoid making any prohibited transactions. The IRS defines these as any improper use of your IRA by you, your beneficiary, or any disqualified person.
For a full list of disqualified persons and prohibited transactions, go here.
How do I get started?
First, consider the investments that you’re interested in. Unless what you’re trying to do is a prohibited transaction or involve a disqualified person, chances are they’re allowed by the IRS.
Second, find your SDIRA provider. No matter your investing strategy or asset of choice, there are some characteristics that you should look for. These include:
- Practical experience: Years in business and assets under management are good indicators of the level of expertise of a prospective provider.
- Investing options: Not all providers accept all assets. For example, some providers may not accept cryptocurrencies or LLCs. Be sure the providers you’re considering accept the assets you’d like to invest in.
- Online capabilities: 24/7 access to your investments via online portal or mobile app is essential for self-directed investing.
- Staff training: Look for a provider whose eligible staff hold the CISP, or Certified IRA Services Professional designation.
Once you’ve chosen your provider and opened your account, you’ll need to add funds to it in order to start investing. There are three methods to do so: transfer, rollover, and cash contribution. These different methods allow you to access funds from an old 401(k) or an existing IRA and put them to work in your self-directed account.
For more details on funding an SDIRA, go here.
What’s next?
Opening an SDIRA can give you unlimited control over your financial future. If you’d like to learn more about how it works and what it could mean for you, download your free copy of the