Managing your self-directed IRA is imperative to keeping your retirement fund secure until you reach your golden years. No matter when you start, as account holder, you are responsible for your account transactions from improving your assets to reporting any changes to your custodian. Whether you have a tax-deferred traditional IRA or a tax-free Roth IRA, your account should receive proper care to ensure you are accumulating a healthy sum.

As your individual retirement account grows, here are a few tips and day-to-day maintenance guidelines you can follow to be sure you are getting the most out of your investments. Remember – due diligence and affirmative action are key to a solid and secure nest egg.

Keep Up With Your Investments

As account holder, you already should have taken the steps to secure investments for your account. With an SDIRA, investors have the added perk of exploring alternative assets to build out a diversified investment portfolio. Depending on the assets in your portfolio, some of your investments may need maintenance. For example, if you have invested in a rental property, the building may need updates, improvements, or general upkeep. It’s important to maintain your properties to be sure the value stays up and your tenants remain happy.

Additionally, any other assets should be monitored. Are your borrowers paying their loans on time? Are your other investments alive and growing your retirement fund? Has your borrower paid off the note or loan and does it need replacing? As time passes, you may have to make changes to your account. Remain vigilant, and keep an eye on your assets as they grow.

Balance Your Portfolio

As you keep a close eye on your alternative assets, it should be noted that a well-rounded portfolio is key to long-term growth. To keep the cash flow steady in your SDIRA, cutting and changing investments is something account holders should do. While some alternative assets may lack liquidity, investors can still make changes to their portfolio to help open up their investment options.

Examine your assets: is there some property that is more upkeep than bread-winner? Has someone slacked in their payments? Maybe your stock choices have been stagnant. Regardless of the type of assets, if your IRA account isn’t growing, it may be time to reevaluate your investment strategy. Trim the assets that are more of a detriment, and focus on better balance.

Explore New Options

Making changes to your portfolio can open your account to new investment options. Are you interested in exploring asset avenues you haven’t before? If you are invested in a traditional IRA or Roth IRA, you may want to explore options beyond stocks, bonds and mutual funds.

If you have a tax-advantaged SDIRA, perhaps the thing your account needs is a new investment. While you want to avoid any forbidden assets, such as life insurance and collectibles, there are new possibilities available every day. For example, a new wave of digital investment is taking the financial world by storm: cryptocurrency. Investing in new assets can add much needed diversity to your portfolio.

Update Your Custodian

As you alter your self-directed account, it should be noted that any changes should be reported to your custodian. All asset values are updated yearly and market values are constantly changing. Whatever the alteration, any updates to properties, changes in values, additions, or sales in your portfolio should be reported to your IRA custodian. Since most custodians are passive, they will not be held responsible for any misinformation, or investment errors. To avoid any issues or the disqualification of your account, keep your custodian up-to-date.

Avoid Prohibited Transactions

In addition to keeping your custodian informed, as you make changes to your portfolio, be sure to remain vigilant to avoid any pitfalls. Be sure all of your IRA purchases are being funded through your IRA and not out of your own pocket. Stay clear of self-dealing, investing with disqualified individuals, and any other prohibited transactions that may lead to tax-penalties or the disqualification of your account. All assets should be approved by the IRS, and no account holder can benefit from an SDIRA account before he or she reaches retirement age. With any investment, it’s imperative to keep up with the rules and regulation to avoid any legal entanglements.

Perform Your Due Diligence

With any investments, account holders need to stay informed. Research and due diligence are critical for a healthy retirement account. Self-directed IRAs are great tools to build up a secure nest egg for your future, but only if you manage your investments well. Keep your portfolio diversified, up-to-date, and avoid any pitfalls that may come about. As always, if needed, seek the advice of a financial professional to solidify your retirement account today and every day. Remain vigilant and your financial future will reap the benefits – contact us today for additional information.