What is a Self-Directed IRA?
A self-directed IRA is really not that different from any other IRA. The term “self-directed” simply indicates that you choose your IRA’s investments. Most investment brokerages and banks that offer “self-directed” IRAs limit clients to the scope of their own investment products. Custodians without proprietary products do not need to impose the same restrictions. This means you have more choices and greater flexibility for your retirement savings plan.
In a time when individual retirement accounts have become commonplace, the self-directed IRA has gained a lot of attention. The self-directed IRA is simply an individuation retirement account that is managed and directed by the account owner, rather than placing full direction in the hands of a third party. Here is some information on how a self-directed IRA works, and why it may be the best option. Government regulations require that a custodian or trustee hold the assets associated with the retirement program on behalf of the account owner. This is true for any type of retirement account, whether the structure is self-directed or not. In most cases, this also means that the trustee or custodian will handle the transactions involved with managing the plan, as well as make decisions on how to invest the funds so the account balance can grow. The trustee is usually a bank or some other type of financial institution. In general, the account owner simply makes the deposits into the accoun
Legally speaking, a self-directed IRA is no different than any other IRA. Having a self-directed IRA simply means that you are allowed to direct the investments of the IRA. Many custodians claim that they allow you to self-direct your IRA investments but then turn around and restrict what you can invest in. A truly self-directed IRA allows you to make the decisions without restriction.
A self-directed IRA is no different than any other IRA. Having a self-directed IRA simply means you are allowed to direct the investments of the IRA. Many custodians claim they allow you to self-direct your IRA investments, but then turn around and restrict what you can invest in. A truly self-directed IRA allows you to make the decisions without restriction.
A self-directed IRA is really not that different from any other IRA. The term “self-directed” simply indicates that you choose your IRAs investments. Most investment brokerages and banks that offer “self-directed” IRAs limit clients to the scope of their own investment products. Custodians without proprietary products do not need to impose the same restrictions. This means you have more choices and greater flexibility for your retirement savings plan.
