Self-Directed IRA: Ultimate Retirement Guide

self-directed ira

There have been various options that are made available to ensure that your investments and assets are protected for your retirement. While you work on growing your wealth and strengthening your investments, you also need to consider other things.

More than the quantity of your investments, you also need to ensure that you get the right balance in your portfolio and the best way to do this is by diversifying your assets.

What is a Self-Directed IRA?

Also known as a checkbook IRA, it is a way for you to maximize your investments, and it’s not just your gold investments.

With an account from a custodian, you can buy different assets including:

  • precious metals
  • stocks
  • real estate
  • trust or mortgage deeds
  • energy investments
  • private LPs and LLCs
  • promissory notes
  • and much more.

Whatever IRA account you currently have (Traditional, SEP, Roth, Simple), you can turn it into a self-directed IRA just as long as the custodian holds it. Mind you, a self-directed IRA has its tax advantages as well.

If you’re a bit confused on what “self-directed IRA” means, it simply indicates that the IRA can buy different forms of assets. For instance, if the term is “Gold IRA,” it refers to gold assets.

Benefits of a Self-Directed IRA

With one of these accounts, you, the IRA holder has the chance to choose different types of investments that you want in your portfolio. How you diversify is up to you, but surely it gives you the flexibility to make varied investments.

  • Diversifying your portfolio gives you protection from inflation rates and market volatility.
  • Invest in what you know and understand, instead of relying on others to manage your investments.
  • Gain access to a range of alternative investments not offered by traditional banks and brokerage firms, such as direct real estate, gold, and more.
  • Partner with family members, friends, or colleagues on new investment opportunities.
  • Use commodities to protect your wealth against economic fluctuation.
  • Watch your investment grow by enjoying tax-deferred or tax-free growth

How do you actually diversify your assets and how can it help you protect your investment portfolio?

With today’s volatile market and evolving financial crisis, it is high time that you invest on assets that will not depreciate or will not lose its value through time. One of the most recommended ways on how to do this is by investing in precious metals. If you have a self-directed IRA, experts recommend that you use about 10 percent of your retirement funds and allocate it for precious metals.

This strategy will help you get a hedge against inflation, especially when the time comes that all prices shoot up, and you have precious metals to protect your other assets. Gold, silver, platinum, and palladium have been proven to help boost other people’s retirement savings in the face of financial risks and challenging situations. You can use this advantage by adding precious metals to your IRA.

Buying Precious Metals with your Self Directed IRA

You can move your IRA to precious metals by transferring your existing IRA or you can also rollover your 401K to an IRA custodian that you trust. The first thing you should do is to open an IRA account.

When you self direct your IRA LLC or your 401(k) investments into precious metals, you can enjoy the fact that your profits are tax-deferred back to your retirement account. If you have a full checkbook control over your self-directed IRA LLC, you can already make the purchases on the spot.

The good thing about this purchase is that the transactions are usually fast and it is a safe investment especially for those with full checkbook control of their IRA account and for those who are self-employed business owners who also serve as the trustee of the 401(k) plan.

By using the self-directed IRA, you create a tax efficient way to provide funds for your precious metals purchase. You also need to know the type of precious metals that are approved by the Internal Revenue Code (IRS) section.

Here is the list of kinds of precious metals and coins that you can use as investment using your self-directed IRA:

  • One, one-half, one-quarter or one-tenth ounce U.S. gold coins (American Gold Eagle coins are the only gold coins specifically approved for IRAs).
  • One ounce silver coins minted by the Treasury Department
  • Any coin issued under the laws of any state
  • A platinum coin described in 31 USCS 5112(k)
  • Gold, silver, platinum or palladium bullion (other than bullion that is made into a coin) of a certain fineness that is in the physical possession of a trustee that meets the requirements for IRA trustees under Code Sec. 408(a).

What to Look For in an IRA Custodian

Just like choosing a bank, you would want a custodian that you can really trust with your money. There are plenty of choices out there, this is a business, so you have to be smart when making a pick. Although some of the best self-directed IRA custodians will be given to you below, it still pays to know what exactly you should look for when choosing a custodian.

  • Years in Business. You want a company that has been in the business for more then 3 years.
  • Number of Clients/Accounts. When a custodian handles thousands and thousands of accounts, this is a good indication that the company is trusted.
  • Assets. The more assets the company has in custody, the safer you should feel.
  • Services. What services will the company provide you? Is it only opening an IRA Account? Or will they also educate you and advise you in making alternative investments.
  • BBB Rating. The Better Business Bureau rating is also a good indication if the company has a reputable name.
  • Location. Ideally, you should pick a custodian that is near you. This enables you to constantly check on your account and not having to deal with long-distance trips.

Top Self-Directed IRA Companies

There are a number of reputable and trusted IRA custodians you can call. But before you do, learning more about the company you are about to deal with should be done.

#1. Regal Assets

regal assets logo
A leading precious metals IRA custodian that prides itself in customer experience and satisfaction. It allows it’s customers by diversifying their retirement portfolio’s by putting precious metals and real estate into their retirement account. With an A+ rating with the BBB and over 300+ positive reviews on Trustlink, it is good reason why they are the #1 self-directed IRA custodian.

Review: Regals Assets Review

#2. New Direction IRA

Partnered with Regal Assets, New Direction IRA is a leading self-directed IRA custodian. They are known for investor education as well as accurate record keeping of retirement accounts. NDIRA allows investors to take full control of their tax-free retirement funds, that is if they want to find an alternative asset to invest in. The NDIRA educates investors to make the best investment decisions possible.

NDIRA clients like that the company has great experience in retirement asset acquisition and their sublime track record in asset documentation and transaction funding.

The company was founded in 2003 and has 8,000 SDIRA accounts at present. They have a total of over $600m in assets.

Website: newdirectionira.com

#3. GoldStar Trust Company

One of the oldest custodians in business is GoldStar Trust Company. It’s been around for more than 20 years and is considered as one of the nation’s leading IRA custodians. GoldStar is very helpful in offering retirement solutions to their clients by assisting them in portfolio diversification. GoldStar Trust Company handles over 37,000 IRA accounts and a total of over $2.2 billion in assets.

Review: GoldStar Trust Review

#4. The Entrust Group

The Entrust Group was founded in 1982, but has undergone numerous changes since. It is a self-directed custodian that follows the face-to-face model. They encourage investors or their clients to go to their office to set up an account. Entrust has 14 offices in the U.S. and has plans of expanding in the coming years. Their head office is located in Oakland, CA.

Back then, The Entrust Group has a franchise model but they decided to end it in 2011. The franchisees decided to put their money into IRA companies instead. Hence, there’s an increase in the number of custodians for investors.

Review: The Entrust Group Review

#5. Self Directed IRA Services, Inc. (SDIRA)

Founded in 2008, SDIRA Services is a wholly-owned subsidiary of Horizon Bank. It provides administration and custody of alternative and traditional assets in self directed IRAs for individuals and small businesses nationwide. They specialize in allowing a wide range of investment vehicles within Traditional, Roth, SEP and SIMPLE IRA accounts including, real estate, trust deeds, mortgages, tax liens, and precious metals.

Review: Self Directed IRA Services Review

#6. Equity Trust Company

Undoubtedly, one of the biggest SDIRA custodians in the business. Equity Trust Company has over 128,000 clients with over $10 billion in assets. The company was founded in 1974 but it was only in 2003 that they officially acquired the Trust Company License.

Review: Equity Trust Review

#7. American Estate and Trust, LLC

AET is a state of Nevada licensed trust company, meeting all state requirements for capital reserves and bonding. Under our license from Nevada, and under Internal Revenue Service regulations, AET is allowed to: Provide full custodial and administrative services for IRAs, 401(k)s, health and educational savings accounts; act as an independent and professional trustee for private trusts (living trusts, etc.); and provide escrow and qualified intermediary services for 1031 real estate exchanges.

Review: American Estate & Trust Review

Setting-up Your Self-Directed IRA

Now that you have learned what self-directed IRA’s are, about the benefits, and the best self-directed IRA custodians in the business, it is now time to go through the process of getting one setup.

Step #1: To get started with the process of adding silver to your current IRA, all you have to do is click this link, and you will be redirected to a page that will ask you to fill out your full name, primary email address, and main phone number.

Step #2: After you fill out the form on this page, you will be contacted by an IRA specialist within 24hrs or the next business day if it is the weekend. You will be able to speak with them about your current situation or ask them any questions that you might have about the process.

Step #3: You should then receive in the mail your free retirement kit that goes into a little bit more detail about the company and the history of gold and silver.

Step #4: From there they will follow-up with you again with any questions and help you step-by-step with the rollover process.

Step #5: That is all and the entire process normally takes only 3 to 4 business days to complete.

It could be by fair be the best decision you could ever make in regards to your retirement.

I’m ready to invest. Where do I start?

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  • http://www.questira.com Beatriz

    Hi, I am an IRA Specialist with Quest IRA. I am wondering how Quest could get our name on this list? We provide fast and friendly services similar to the companies listed. Quest IRA also used to be formerly known as Entrust Retirement Services.

    Please let me know!

    • Donny Gamble

      Beatriz, thanks for reaching out to us about getting your company listed on this page. We have to do a little bit more research about your company before adding them to our list of recommended self directed IRA companies.

  • http://www.traffic-tiger.com Saleem Rana

    Donny,

    This is a masterful article. Totally clear about how a self-directed IRA works and why one should get it. Awesome.

    • Donny Gamble

      Thanks Saleem.

      Self directed IRA’s are definitely great retirement vehicles because they allow the account owner to have more control over their investments and achieve more diversification with other asset classes instead of just one.

  • Rob

    Is it possible to loan a person a part of my retirement plan and replace it with a Promissory note for lets say 5% for 5 years?

    • Donny Gamble

      Rob, great question. I would recommend that you ask your financial advisor that question in terms of if it is the best way to loan someone else money from your plan.

  • Peter

    I want to purchase $25,000 of penny stocks out of my current Fidelity IRA. However I am getting a discount on these stocks so we cannot go through the standard Fidelity process which is only set up to pay market price. Bottom line, the only way I can do this is to take out $25,000 plus whatever taxes I need to pay in order to end up with $25,000 cash. I obviously don’t want to do that. My thinking is to somehow utilize a self directed IRA to accomplish my goal which is to purchase $25,000 worth of stock with non-tax paid IRA funds. Any help or advice is appreciated.

  • Kirk

    I came here seeking reputable IRA custodians for self directed IRA’s I was shocked to find Equity Trust as #6 in your top 10. I spent a couple hours last week checking reviews and BBB complaints. This company should not be in business, let alone in your top 10. Really adds to your credibility, don’t you think?

    • Donny Gamble

      Kirk thanks for the feedback.

      There aren’t that many quality, let alone legitimate self-directed IRA custodians out there, so I had to create the list based on the best of breed. I would check out the companies near the top of the list, as those are great companies to properly go with.

      Hope that helps!

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