When you invest in your retirement, you want to know that your efforts are going to yield the results you seek. And, though there are risks associated with every type of investment, some avenues can be considered safer than others. This is particularly true for investors that monitor the market and stay informed about rules and regulations. As such, when managed properly, self-directed IRAs can offer diligent investors a safe path to their future.
When you open a self-directed IRA, you gain a unique mixture of diversity and control that can offer a safe path towards higher returns. Here are just a few reasons why a self-directed IRA can be a safe way to reach your retirement goals.
1. Asset Diversity.
We’re often advised against putting all of our eggs in one basket, and that advice remains when investing. Typically, it’s a good idea to diversify your stock portfolio, but even then, a hard hit on the stock market can leave your retirement plans in shambles.
When you invest through a self-directed IRA, you have the opportunity to extend your investments past stocks and bonds and into other assets, like real estate, precious metals, etc. This allows for true diversity while maximizing your ability to see a return and providing protection against stock market volatility.
While many investment firms are guided by fiduciary responsibility, that doesn’t always mean your portfolio will receive the personal attention it deserves. That can make it harder to reach your goals or take advantage of unexpected investment opportunities.
A self-directed IRA gives you control over your investments, allowing you to make educated decisions about your immediate goals and long-term retirement plans – wherever you are in your life.
3. Built-In Tax Benefits.
As with a traditional IRA or a Roth IRA, a self-directed IRA offers tax advantages. However, a self-directed IRA can increase those benefits. This is particularly true when you decide to invest in things like real estate or other types of business opportunities that may suit your interest or experience. That’s not the case for other investment strategies in which your investment paths are limited – specifically stocks, bonds, and mutual funds.
4. Protection From The Unexpected.
Though no one wants to be faced with bankruptcy or creditor issues, these circumstances do arise. And, when they do, it can be difficult to manage your everyday expenses, but what about your long-term investments? Fortunately, your self-directed IRA funds are protected from both federal and state bankruptcy.
Self-directed IRAs, like other investment vehicles, also offer protection in the event that something should happen to the account holder. As such, you can rest assured that if you should pass on, your funds will transfer to the individual(s) you’ve specified.
5. Active And Passive Growth Opportunities.
A self-directed IRA gives you the unique ability to actively and passively contribute to your retirement fund. Like traditional and Roth IRAs, which rely on stock performance, you can see growth in good markets. However, a self-directed IRA offers the flexibility to make moves that actively increase your retirement fund. This is particularly true when it comes to real estate investments that result in the regular transfer of funds, like rental properties) or one-off transfers, like property or deed sales.
6. Higher Return Rates.
A self-directed IRA may help you reach your goals faster. Though it’s not true in all cases, when you set up a solid portfolio that leverages alternative assets with high yield returns, then a self-directed IRA can help you see significant upfront growth. This can help you develop a strategy that will secure your retirement as opposed to hoping for enough growth in the traditional investment sector.
7. Maintain Checkbook Control.
When you establish a self-directed IRA LLC, you gain checkbook control. This gives account holders full authority to purchase assets freely. That means you won’t have to turn to your administrator or go through lengthy paperwork to make purchases. Instead, you can move funds – e.g., write checks – whenever you want to purchase an investment asset. It can also help you avoid costly transactions or administrative fees that may otherwise occur.
Checkbook control can, therefore, add a level of security for investors who want to maximize their efforts as they see fit. This is particularly true when it comes to real estate investments – particularly those that require quick movement.
Investments of all types come with risks, but for many investors, a self-directed IRA offers a safe path towards positive growth. With asset diversity, direct control, and unparalleled flexibility, a self-directed IRA is worth considering. Contact us today to learn how you can get on a safe path to retirement.