Can a Self-Directed IRA Help Me?

February 26, 2024

We enjoy having choices, whether it’s a wardrobe filled with various options or a variety of flavors to select from at our preferred ice cream parlor.

Understanding a Self-Directed IRA

A self-directed IRA (SDIRA) is a retirement account that offers tax benefits and is similar to a traditional or Roth IRA. The main difference is that SDIRAs allow for investments in a variety of “alternative” options that are typically not available in regular IRAs.

Many individuals who open a self-directed IRA typically utilize them for investments with longer time horizons, which may be more challenging to purchase and sell compared to easily accessible stocks, bonds, or mutual funds (referred to as “less liquid” investments in the world of investing).

Advantages

  1. They offer a wider range of investment choices and increased flexibility for investors.

Self-directed IRAs provide a multitude of options and increased adaptability for the investments within your account. Additionally, you can still receive the same tax advantages as a traditional IRA.

  1. Investing based on your knowledge and experience is made possible by them.

With self-directed IRAs, individuals have the opportunity to save for their retirement by investing in areas that align with their interests, expertise, or experience. For instance, if you have a strong understanding of rental real estate, a self-directed IRA enables you to utilize that knowledge and purchase a property that has the potential to increase in value over time, allowing you to generate income that is directly deposited into your retirement fund.

  1. One possible benefit is that they may assist in diversifying your investment portfolio.

Lastly, a self-directed IRA could act as a great addition to any funds you currently hold in standard investment accounts or other retirement accounts, allowing you to broaden the scope of your retirement portfolio.

Potential Drawbacks

  1. These services typically come at a higher cost and require complex recordkeeping.

Due to the intricacy of self-directed IRA investments compared to more conventional ones, the majority of companies providing them will impose above-average maintenance fees, which could potentially decrease your profits.

  1. There are numerous regulations and protocols that must be adhered to.

In addition, it is important to note that the IRS has established prohibited transactions that must be taken into consideration. These transactions can be compared to landmines, as they have the potential to negate any tax advantages associated with a self-directed IRA.

  1. These investments are frequently associated with high levels of risk.

Let’s consider the fact that self-directed IRAs primarily involve high-risk investments. It is worth pondering whether relying on unpredictable assets like cryptocurrency or complex investments such as “tax lien certificates” for retirement savings is a wise decision.

Conclusion

Are you trying to find a financial advisor in Fresno? Look no further than Soutas Financial & Insurance Solutions Inc. your financial advisor Fresno, Ca is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment strategies that focus on Asset Protection, Long-Term Care Strategies, Legacy Planning, Tax- Efficient Strategies IRA, 401(k) & 403(b) Rollovers, Life Insurance, Annuities, Medicare, we can help you develop an overall retirement income strategy specific to you and your family.

We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. The commentary on this website reflects the personal opinions, viewpoints, and analyses of the author, Soutas Financial, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security, or any security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Foundations deems reliable any statistical data or information obtained from or prepared by third party sources that is included in any commentary, but in no way guarantees its accuracy or completeness.

YOU HAVE A

DREAM.

LET'S MAKE A

PLAN.

CONTACT US

Phone: 559.230.1648