Are you looking to grow your retirement funds? Of course you are, we all are!
Here is an idea that may benefit some of you who are reading this article. Take a look at self-directed IRAs. What is a self-directed IRA? I am glad you asked. Here is the simplest definition:
A self-directed IRA is an IRA in which its custodian or administrator allows the IRA account to hold alternative assets rather than just investing in the stock market. It is that simple. At least the definition is. There are several intricate details and rules that come along with self-directed IRAs that you should really speak to your tax advisor about.
What can a self-directed IRA invest in?
Yes, I am going to show you the money! Here is a comprehensive list of the investment opportunities of a self-directed IRA:
- Homes, apartments and condominiums
- Commercial properties (retail stores, hotels and office complexes)
- Trust deed notes, mortgages, and tax liens
- Raw land and lots
- Real estate options
- Other properties (farmland, boat slips, mobile homes, and timber rights)
- Limited liability companies (LLCs) and Limited partnerships (LPs)
- Private common stock, preferred stock, options, rights, and warrants
- Private hedge funds and funds of funds
- Private and non-exchange traded Real Estate Investment Trusts (REITs)
- Foreign private equity
- Exchanged traded funds
- Convertible notes
- Secured notes (typically real property, mortgages)
- Secured notes (collateral based notes, mobile homes, equipment, etc)
- Unsecured notes (bridge or “hard-money” loans)
- Traditional assets (mutual funds and securities)
- Precious metals (gold, silver)
- Land and mineral rights
- Peer-to-Peer Lending
As I stated when defining self-directed IRAs, there are some rules to follow that have been set in place by the IRS. But if you can navigate the rules, self-directed IRA investing can be rewarding!
Here are three important things to consider when it comes to self-directed IRAs:
- You will need to work with an alternative asset custodian to open a self-directed IRA. Your bank won’t open one because they aren’t one of these custodians. Your financial planner will probably not want to open one for you so you have to find a custodian.
- You will need to work with an accountant and attorney who are familiar with self-directed IRAs. Not every accountant or lawyer has worked in this area.
- Understand that the term “self-directed” means that you have more control over your IRA investment than you would in a Roth or traditional IRA.
I am happy to assist it you need help navigating self-directed IRAs!