You might already know that a self-directed IRA is an IRA that allows for total control over your investments. It also offers a greater flexibility with regard to types of investments are allowed to be made, but do you really know all you need to know? If you were to take a self-directed IRA quiz right now, would you pass? Keep going to find out.

Question 1: Can you rollover your 401K into a self directed IRA?

Many will set out to rollover a 401K and be totally unaware that they cannot only roll that account over into a standard or ROTH IRA, but they can also opt to roll it over into a self directed IRA. You can rollover your 401K to a self-directed IRA and, in some circumstances, you can even do this regardless of whether or not you are still employed at a specific company or not.

Question 2: True or False – Real estate is the only alternative investment that a self-directed IRA allows.

False. A self-directed IRA allows for many alternative investments in addition to real estate. Along with real estate you can invest in physical gold, silver, notes, private equity, tax liens, and more.

Question 3: Can you buy stocks and mutual funds in a self-directed IRA?

When you have a self-directed IRA, you have one with all the investment options of a standard and ROTH IRA plus a whole lot more. This includes being able to buy the typical investments allowed by both standard and ROTH IRAs including stocks and mutual funds.

Question #4: Can you buy life insurance in your self-directed IRA?

While a self-directed IRA does allow for the most amount of investment flexibility, there are still investments that the IRS prohibits. One such investment is life insurance. A complete list of prohibited assets can be found at the IRS website or can be obtained by the company you choose to help you with your self-directed IRA services.

Pass or Fail?

So, how did you do on your self-directed IRA pop-quiz? If your answer is, “not that good” then you need to learn more about a self-directed IRA. This can be done by finding a self-directed IRA service that has the knowledge and experience to explain to you all the ins and out of this type of IRA. The more you know about a self-directed IRA the better off you will be in determining if one is right for your particular set of circumstances.

Click to learn more about how an IRA facilitator can help you gain the ultimate IRA investment control.