Self-Directed IRA – Making Your Money Work like You Want It To

Investing in your future is a great way to make sure that you have something when you retire. While many people usually are content to let someone else handle all their accounts. I mean why deal with the hassle of an individual retirement account yourself? But there are those that like to be a little more hands on with their money. They aren’t just content to make a deposit. For these people a self-directed IRA is just what they are looking for.
So what exactly is a self-directed IRA? This type of individual retirement account is an account that the individual who owns the account makes the direct investment decisions. That means that if you are an owner of one of these types of accounts you get to say what stocks, bonds or mutual funds that you invest in. Unlike most individual retirement accounts, such as a Roth, you can also invest in other options such as foreign real estate, mortgages, franchises, and tax liens. You have total control over where your money is being invested. You also can make slightly larger deposits than you can in a more traditional individual retirement account, most of which are capped at $5,000 per year.
While you the owner will have all the power to decide where your money goes the federal government does have regulations restricting a self-directed IRA. One of these regulations is that you must appoint a trustee or custodian to look over the account. This person should be someone familiar not only with financials but individual retirement accounts. You can’t just ask anyone to look over these types of accounts and nor should you want to. Their job is to ensure that the appropriate paperwork is filed with the government as well as maintain your assets, investing them only when and in what you say, and giving you all the monthly or quarterly statements you need to help you determine how you want the accounts handled. They are also there to help you muddle through all those rules and regulations which, quite honestly, can be very confusing.
A self-directed IRA will give you more freedom and options than a traditional retirement account. You will have more options to choose from. Many people enjoy that freedom to decide how their money is invested and not just choosing from the handful of plans that their broker has available to them. But it really can be tricky. You should have a mind for business or at least the ability to research up on what you want to invest your money in before pursing this type of account. While the trustee can give you guidance you will ultimately have to make the decision. If you don’t know the first thing about stocks, bonds, mutual funds or just general investing then this is possibly not something that you will want to pursue.
Freedom to make sure your money goes where you want it to, that’s something we would all love. If you have the mind for the numbers game or are willing to learn then you might be interested in pursuing a self-directed IRA.