When it comes to retirement savings, rather than relying on a bank or trust company, it sometimes can be beneficial to take charge of your own plan. Self-directed investing puts you in the driver seat; it allows account holders to build their own retirement portfolio using a variety of assets for maximum long-term growth.
Of course, handling your own investments can be a little complicated and the IRS does require you to have a certified IRA custodian oversee your account. Selecting the right custodian can be as difficult as choosing the best assets for your portfolio. Here are a few tips to help you select the best custodian for your account.
First – What Is A Self-Directed IRA?
Before you go looking for a custodian, the first step toward self-investing is deciding if it is the right choice for you. A self-directed individual retirement account, or SDIRA, is a savings account where the investor is in control of all investment decisions. This option provides self-directed account owners with more opportunity to invest outside traditional investments like stocks, bonds, and mutual funds. SDIRA owners can take advantage of alternative assets such as real estate, precious metals, or private lending.
With self-directed investing, you can build a diverse portfolio and boost your retirement savings. Though there are benefits to running your own retirement account, it is more of a risk since you are taking on the investments. You can select traditional IRAs with tax-deferred growth or a Roth IRA for tax-free growth. More importantly, when it comes to selecting your custodian, you should have an idea of where you want to invest your hard-earned money and how.
Choosing The Right Custodian
The IRS mandates that SDIRA accounts are overseen by IRA custodians. Custodians handle the account and provide services to the account holders. Depending on your assets, IRA type, and plan, your custodial needs may vary. Carefully consider what you want out of your custodian. As you begin your search, keep the following tips in mind.
1. A Wide Base Of Knowledge
A good custodian should be knowledgeable of a wide variety of investment options. The key to a successful retirement plan is a diverse portfolio. It’s important to select a custodian who has a greater understanding of the investment options you are considering, such as stocks, bonds, mutual funds, and any number of non-traditional investments. Check into their credentials; what is the scope of their coverage? How will their skills match your investment strategy? Find a custodian to match your retirement vision.
2. Great Customer Service
A knowledgeable specialist is crucial for a successful account, but you need to be able to get a hold of them. Select a custodian who works hard for their clients. They should be available when you need them and be able to answer any questions you may have. Their answers should be clear and concise, plus a good custodian should be willing to walk you through the information. Having an excellent better business bureau score is a good place to start as well.
3. Easy to Access Information
Easy access to information is just as important as the information itself. A good custodian should be accessible and so should their services. A simple way to do this is through a user-friendly website with clearly posted hours of availability and easy access to information. It doesn’t take much to list an email or phone number on a website. Additionally, you should be able to look up their service and see what they have to offer. What exactly are their services? What is their client service model? A good custodian should have this information ready and available for all potential clients.
Another thing to look for in an IRA custodian is transparency. Visibility should be a top priority, and you want a service that is very open with its customers. There shouldn’t be any guesswork or surprise fees; the expectations, charges, and services should be very clear from the beginning.
- Are they able to answer all your questions?
- Are they able to handle complex transactions?
- Are they an actual custodian?
Keep in mind, your account must be handled by a certified IRA custodian. IRA administrators and facilitators do not qualify. A good custodian will be upfront about their credentials and services.
5. Budget Friendly
As you circle around your potential IRA custodian, the final thing to consider is cost and transactional fees. Cost is an important factor when selecting a custodian; you don’t want hidden fees draining your account when you could be saving for your retirement.
Discuss the rates. Does your custodian have annual charges, upfront charges, or fees per transaction? What are the policies? You want to get what you pay for, so make sure you’re getting true value for the service.
Which Custodian Is Right For You?
Selecting your custodian takes time and careful research, much like selecting your investments. Once you put in the research, you can find a custodian that will work hard for you without draining your bank account. As always, perform your due diligence and find a service that fits your retirement vision. With the right custodian, you can start investing in your self-directed retirement plan today. For additional information, contact a trusted Horizon Trust custodian today.