Set Up a Truly Self Directed IRA and Gain Ownership of Your Retirement
You are the person who best knows the value of your hard-earned money. It therefore naturally follows that you should have the freedom of deciding how to build your retirement nest the way you want. Why leave the important decisions about your retirement lifestyle to an outside agency, when you can set up a truly self directed IRA (through a self directed IRA LLC) and use investment strategies to create the future that you want for yourself?
What’s Wrong with My Existing Self directed IRA?
Both a traditional IRA and the standard self directed IRA require you to operate with your IRA custodian’s approval. In other words, you need your broker or custodian to grant you permission to invest your own money. Self directed IRA holders are only slightly better off than those with a traditional IRA in the sense that they have access to additional investment opportunities.
Yet, as even those with a self directed IRA will agree, the process of operating the account can be frustrating, as you move through the custodian’s bureaucratic process and incur nickel-and-dime fees that add up quickly. This is where a truly self directed IRA, otherwise known as a checkbook IRA or IRA LLC, outstrips the traditional and standard self directed IRA.
How Is an IRA LLC Different from a Self Directed IRA?
A truly self directed IRA is an IRA that allots its owner checkbook-writing privileges, or checkbook control. Checkbook control provides you, as the IRA account holder, complete freedom to decide how, when, and where to invest your money—so long as you remain within the self directed IRA rules. Stocks, bonds, tax liens, real estate, silver, or gold – whatever your preference, you can choose your investment from a wide spectrum of options.
Standard self directed IRAs can be a real drain on the very money you are seeking to save. Whether you’re reviewing investment deals, carrying out a transaction, earning a profit, or even simply holding an account, standard self directed IRAs charge you fees for every single action.
Contrast this with a truly self directed IRA, where you retain funds in the self directed IRA–owned bank account. You get the same range of services, but pay only a nominal amount just once a year. In other words, you stop the drain on your resources and save a sizeable amount over the lifetime of your IRA.
Why Choose a Self directed IRA LLC?
Selecting an IRA LLC offers a few significant benefits, such as:
- Limited liability and asset protection
- True checkbook control and flexibility to invest in what you want when you want
- Flow-through taxation that ultimately gives your entity the tax-deferred or tax-free benefits of an IRA
- Definitive separation between your IRA’s investments, your investments, and other investments made under the same custodian
- A tax advantage over other investors who are competing for margin
- A time advantage over other investors who are competing for an investment
This translates into an improvement in your tax-free or tax-deferred gains.
You no longer have to worry about bureaucratic red tape causing delays and potential loss. With a checkbook IRA, you are the sole decision maker, with the freedom to make instant decisions for the best possible results.
Other Benefits of a Truly Self directed IRA
Self directed IRAs are easier to operate and control. They are less expensive and provide the user with several less obvious benefits, including:
- Minimal IRA custodial intervention
- Maximum liberty to make investment decisions
- Easier investment in foreign assets (depending on the custodian)
- Added protection from litigators and creditors
- A tax-free account with a self directed Roth IRA plan
- Less paperwork, which means faster processing
- The ability to make investments that would not be feasible through a custodian
- The ability to get in and out of multiple investment markets and trends in one consolidated vehicle versus various brokers and custodians.
The biggest advantage of a self directed IRA LLC is that it recognizes your full rights to hold and grow your individual retirement account. All custodians, whether they hold your deposit, securities, or private investments, have their own in-house restrictions on what they will allow your IRA to hold. By law, however, an IRA is only restricted to certain transactions and investments that would circumvent the ultimate purpose of an IRA: to save money for retirement. As long as you don’t make one of these prohibited investments or transactions, you can invest your IRA into any vehicle you want.
Get Information about a Self directed IRA LLC
Want more convincing reasons for why truly self directed IRAs are your best option? Ask any economist about the best ways of generating wealth and I’m sure real estate investments will be at the top of the list. It is also prudent to invest in assets that you can research, know, and understand rather than securities or other investments that can be tedious or nearly impossible for ordinary investors to truly grasp. You may be thinking, Okay, then why doesn’t my broker or custodian recommend this as a vehicle to grow my retirement portfolio? The answer is usually because your real estate or “investment” doesn’t pay commissions or generate real wealth for anyone except you. You’ll cut out a long line of middlemen and paper pushers, but lucrative returns don’t necessarily mean high risk. The downside is that you will need to make all of the decisions yourself. This may mean that you’ll need to hire a professional at times. Do the pros outweigh the cons? That is for you to decide. Unfortunately, most people don’t know that it is perfectly legal for IRAs to invest in real estate. The bottom line is that it makes good economic sense to add real estate along with other allowable assets into your IRA or 401k.
Invest in a Real Estate IRA
When it comes to investing in real estate with a self directed self directed IRA LLC, the sky is the limit. Depending on your individual preference, you can choose from a wide range of real estate IRA investment options that include:
- Foreign real estate
- Investment property purchase
- Commercial property purchase
- Raw land
- Mortgages and deeds of trust
- Partnerships
- Private developments
- REITS
- Foreclosures
- Tax liens and deeds
As time goes on, the possibilities become virtually endless.
Diversify Your Self directed IRA Investments as You See Fit
Choose the area in which you feel most comfortable. It is widely established that the more you diversify your investment portfolio, the less risk you incur and the greater your ability to weather a financial storm
If real estate is not your cup of tea, don’t fret. You can invest in several other asset classes using a truly self directed IRA, such as:
- Discounted notes
- Mutual funds
- Bonds
- Physical silver and gold
- Tax liens and deeds
- Stocks and options
- Private placements
- Foreign currency
- Futures
- Secured and unsecured loans
Consider Setting Up a Self Directed Checkbook IRA
A checkbook IRA account grants you the same facilities as a business checking account, but it is owned by your IRA account, not you. After you complete the necessary formalities, you receive the checkbook and a debit card for this special IRA account. Operating this account does not call for any specialized skill; it’s as simple as maintaining your regular bank account. How difficult is balancing a checkbook and maintaining a file folder for supporting documentation, bank statements, settlement statements, and contracts? With a checkbook IRA, there’s no more waiting for approval with fingers crossed or agonizing over your custodian prohibiting investments that are legally allowed. Once you decide on making a real estate IRA investment, all you need to do is sign the check from your IRA account, and it’s done!
What is the Custodian’s Role in Checkbook IRA Services?
An experienced custodian is an invaluable asset to IRA account holders; at no point are we suggesting anything to the contrary. In fact, as a provider of IRA services, we work with several competent custodians. When you open a truly self directed IRA, you still need a custodian because they are required in section 408 of the tax code. With checkbook IRA services, you will not have to run every transaction through your custodian to determine if it is allowed in their plan document and administratively feasible for them to hold. You will only utilize the custodian to invest and hold your IRA LLC and to report to the IRS on an annual basis.
Take Control of Your Retirement Plans
When you work hard at your job day after day, month after month, and year after year, your retirement funds may be put aside and out of sight. However, that doesn’t mean they should be out of mind. Just like your take-home pay, your retirement funds are your money and should be there for you and your future. Unfortunately, many people buy into the belief that it is better to let the “experts” handle your life savings. Many of us have seen what the so-called “experts” can do, and we aren’t buying. When it comes to your future and the future of your family, there will never be enough, so why simply hand over your future to an outsider without thorough research and due diligence?
A Word of Caution Before Going Truly Self Directed with Your IRA
When operating on your own, you need to steer clear of any transactions that are prohibited by the self directed IRA rules. To the trained eye, these rules are very easy to identify, but the average investor can easily violate them without even knowing it. Unknowingly violating these regulations invalidates the IRA and makes you liable to pay taxes and possibly hefty penalties. When you choose a truly self directed IRA, your custodian may not always be there to point out potential violations—although you are always free to contact the custodian who oversees your IRA account and ask questions. Sometimes they may tell you to find an expert in that particular field, because there are many areas of tax and law about which they cannot give advice. If you have a question, you want to make sure someone will be there to help. This is where we come in. Not only do we make sure your IRA LLC is set up to be in compliance with IRS rules and regulations, we meet the individual custodian’s requirements and facilitate the whole process to make sure that everything flows smoothly through the proper channels. We are also there for support after the fact.
Call Us Today If You Want To:
- Enhance your retirement investment options with alternative assets.
- Increase your return on investment by saving on custodian fees.
- Get checkbook control of your future IRA transactions.
- Close investment opportunities in a timely manner and move to a truly self directed IRA.
- Receive ongoing support with your self directed IRA questions.
Take the first step toward growing your retirement nest just the way you want to. Call and speak to our truly self directed IRA specialist today to learn more about the self directed IRA LLC option we offer.
