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“You can get past the dead end. You can break through the ceiling. I did and so have countless others.”

Finance Tip Friday #7: Self Directed IRAs

Chart Businessman Money Statistic  - mohamed_hassan / Pixabay

Many of you have a tax advantaged IRA account that you invest in for retirement (if you don’t, you should). But did you know there is something called a Self-Directed IRA?

A Self-Directed IRA is like a standard IRA, but it allows you to invest into alternative investments. Like your 401k, standard IRA accounts usually only allow you to invest in stocks, bonds, and mutual/index funds. A Self-Directed IRA on the other hand allows you to invest outside of the standard market.

With a Self-Directed IRA, you can invest in other asset classes such as real estate, precious metals, and even your business… WITH PRE-TAX DOLLARS! This is super critical if you are looking to invest outside of stocks and bonds.

Did you know that you can transfer all your pre-tax retirement accounts (401ks and IRAs) into a Self-Directed IRA? If you have $100,000+ in your retirement accounts, you could transfer it into your Self-Directed IRA to purchase a rental property! Cash and tax free!

There are certain rules and limitations though. If you decide to go this route, there are multiple companies or “custodians” that can set this type of account up for you and discuss with you all the various rules surrounding them. I just use a local financial institution for mine. Simply go to Google and type in “Self-Directed IRA” and you will find a plethora of institutions that can set this up for you!  

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