Self-directed IRAs offer a unique way to build retirement savings. Self-directed accounts differ from traditional retirement accounts in that they allow for alternative investments that are not traditionally offered by banks and other management firms.
Investments Allowed in a Self-Directed IRA:
- Accounts receivable financing
- Various real estate (homes, apartments, condos, commercial property, air space, billboards, offshore real estate, trust deeds, mortgage notes and more)
- Contracts of sale
- Foreign sales corporation stock
- Gold bullion, palladium, US Treasury gold and silver coins
- Limited liability companies (LLCs)
- Limited partnerships
- Private placements
- Securities, CDs, stocks, bonds, mutual funds
- Tax lien certificates
- And many more
There is actually very little that a self-directed IRA cannot invest in:
- S corporations
- Collectibles (such as art, antiques, wine, jewelry, etc).
Types of Accounts
There are various types of self-directed IRAs designed for various needs.
There are two types of accounts for individuals seeking to replace or supplement an employer-sponsored plan; self-directed Traditional IRAs and self-directed Roth IRAs.
These accounts differ in the way they are taxed. Traditional IRAs will be taxed upon distribution (when you take money out of your account during retirement), while Roth IRAs will be taxed upon contribution (when you put money into the account during your saving years).
Note: Individual self-directed accounts are also available to those saving for the purposes of health or education. Health savings accounts (HSAs) and educational savings accounts (ESAs) can help to relieve the burden of saving for retirement by providing a cushion for some of life’s largest expenses.