FAQs
Here are some frequently asked questions about self directed IRAs:
What is a self directed IRA?
A self directed IRA is a retirement account that puts you in control of your IRA investment. Unlike most retirement accounts whose investments are chosen by an account and/or fund manager, you choose what to invest in with a Self Directed IRA. This allows you to diversify your retirement portfolio’s investment and maximize returns.
What types of investments can I make with my self directed IRA funds?
Exclusive, rather than inclusive, rules govern self directed IRAs. This means that the guidelines spell out what you cannot invest in. This is actually by design because the list of what you cannot invest in is much shorter than what you can invest in. Examples of investments that are prohibited for a self directed IRA include: collectibles (eg, coin collections); S-corp capital stock; and insurance contracts. Beyond that, it's up to an IRA custodian to determine what types of investments it will permit.
With Self Directed IRA Services, Inc. the investment options within a self directed IRA are practically unlimited. You may hold traditional investments such as stock, bonds and mutual funds in a brokerage or clearing account of your choice. If alternative investments are something you're considering, an IRA with Self Directed IRA Services, Inc. may hold real estate (residential, commercial or raw land), trust or mortgage deeds, tax liens, precious metals, private or closely-held stock, private LPs or LLCs, promissory notes, corporate debt and more.
Because there are such a broad range of investment vehicles, you can structure the diversity of your portfolio any way you like.
How do I open a Self Directed IRA account?
It's easy to open a self directed IRA. Simply follow the easy 3-steps in our Get Started section of this website.
Need help? Call us at 866.928.9394 and one of our knowledgeable self directed IRA specialists will assist you in opening your new account.
Can I rollover or transfer existing retirement accounts into a self directed IRA?
Yes, you have several options for funding a self directed IRA.
- You can easily request a direct transfer of cash or asset from existing IRAs you may have with brokerage firms, banks, mutual funds, insurance companies, etc.
- If you have retired, changed jobs, or left employement for any reason, you may initiate a direct rollover from an existing 401(k), 403(b), 457 or other retirement plan.
- If you've already received a distribution of cash or assets from another IRA or an employer-sponsored plan, you can complete a rollover, sometimes referred to as an indirect transfer or indirect rollover, provided this is completed within the required 60-day time period.
How long the transfer or rollover takes depends on the type of account being transferred or rolled over. In general, it can take anywhere from a few days to a month. Once your IRA account satisfies the statutory 7-day right of rescission period, and Self Directed IRA Services, Inc. has received cleared funds in your IRA account, you can start investing. It’s that simple.
Self directed IRAs seem like are an ideal way to take control over my retirement funds. Why don’t more people know about them?
Simple economics might explain this. Many investment brokerage firms, insurance companies, mutual funds and banks promote IRAs by selling their products, often ones that benefit their bottom lines and pay commissions to their representatives. However, with the growing trend of Americans becoming disillusioned with the ups and downs in the stock market, along with baby boomers looking for more control in their retirement investment decisions, many are seeking ways to expand their investment options and are learning about self directed IRAs. This, coupled with the popularity of media publications, educational seminars and usage of the internet, now make it much easier to readily learn about self directed IRAs.
Why am I required to have an IRA custodian and what does an IRA custodian do?
Federal law requires that you have an IRA trustee or custodian appointed for your IRA account. The appointment of the IRA trustee or custodian is part of the legalese in the IRA account application and/or agreement when you establish an IRA with a bank, brokerage firm, mutual fund company or other financial institution.
The duties of an IRA custodian are very limited, and include setting up your self directed IRA account, ensuring assets are titled correctly, processing your instructions as directed, issuing periodic statements and fulfilling the IRS reporting requirements. An IRA custodian does not advise you on investments or profit in any way from the investment decision you make. A self directed IRA custodian typically charges fees in the form of an annual fee and service fees.
