One of the most daunting tasks we face as we reach retirement age is makings sure there’s a solid nest egg waiting for us. Planning for your golden years takes careful consideration, and with so many banks, trust companies, and fund managers, it’s hard to decide who has your best interests in mind.

Sometimes the only person you can rely on to plan for your future is yourself; and the best way to prepare for your retirement is with a self-directed IRA. If you are interested in taking charge of your own investments, here’s what opening an SDIRA can do for you.


Self-Directing Your Retirement


An SDIRA is a self-directed individual retirement account. What does this mean for you? As the account holder, you can take charge of your own investments. The investor oversees all the investment decisions from selecting the assets to allocating funds.

Additionally, being self-directed grants you the opportunity to break tradition and invest in alternative assets, giving you a greater variety and growth options. You are no longer limited to the traditional stocks, bonds, and mutual funds. Having an SDIRA opens many new investment avenues for you to explore and can really help you build a solid nest egg.


Selecting the IRA for You


When selecting your self-directed IRA, consider the following things: how much do you have for initial contributions? Do you want an up-front tax break, or would you prefer your withdrawals be tax-free after retirement? The two options available to SDIRA owners are traditional IRAs and Roth IRAs. Traditional IRAs are an excellent choice for investors with some starting money.

Contributions to the account are made tax-deferred until withdrawal after retirement. The benefits of a traditional IRA come in the form of a decent tax break and overall higher contribution growth. However, as account holders reach retirement age, any withdrawals are subject to taxation.

Roth IRAs don’t have the initial tax break; their benefit is in tax-free withdrawals when the account holder hits retirement age. Additionally, if you don’t have the minimum contribution requirement for a traditional IRA fund, Roth IRAs have no minimum payment.

By investing with a Roth IRA, you can build your account without a hefty starting sum. Consider what you can invest and how you want it to grow before making any selections. Also, the assets you select should factor into your account choice.



Consult with Horizon Trust

Discovering Alternative Assets


Beyond the traditional stocks, bonds, and mutual funds, self-directed IRAs allow investment in alternative assets. This design allows account holders a wider base of options to build a truly diverse portfolio for better retirement fund growth. Investors can invest in real estate, trust deeds, precious metals, cryptocurrency, private lending, and more.

With so many options, it’s possible to build a portfolio with a mix of slow-growing and high-pay-off investments. As you build your portfolio, it’s not wise to spread your investments too thin or place all your funds into one asset. Variety is key. In addition to diversity, be aware of what the internal revenue service allows and doesn’t when it comes to alternative assets and investment transactions.


IRS Regulations


Due to the open nature of self-directed investment, the IRS handles every account closely. To avoid any mishaps with the IRS, perform your due diligence to ensure you are following all the proper rules and regulations.

As you open your SDIRA, the IRS demands that you have a certified IRA custodian oversee all transactions. This nonpartisan third party is put in place to ensure all investments are by the book. While there are no clear regulations on which alternative assets are allowed, the IRS has a clear list of what is not. Life insurance, collectibles, tangible items, and certain metals are not permitted.

In addition to forbidden assets, there are prohibited transactions you should avoid. The IRS doesn’t allow self-dealing, use of any IRA owned properties, or transactions with any disqualified individuals. With any investment, it’s imperative to enlist financial advisors to be certain your account is set up accordingly.


When to Select an SDIRA


The most important part of setting up an SDIRA is performing your due diligence. Select assets you are knowledgeable of and keep track of the market. Without prior knowledge, investment can be very tricky. Staying on top of your assets is the best way to ensure long-term account growth.

Consider your investment options, update your portfolio, and chronicle all important transactions. As your retirement fund grows, stay savvy: follow the rules and regulations set up by the IRS, consult your financial advisor, and update your custodian. With the right steps, you can build a comfortable retirement account to the benefit of you and your family.


Getting Started with a Self-Directed Account


Opening an SDIRA is the first step toward taking charge of your own retirement. As you look to the future, be sure to perform your due diligence and seek out the assistance of a financial advisor. There’s no time better than now to plan for the future. With the proper assets, a solid portfolio, and a good custodian, you can secure a comfortable retirement on your own. Start planning by contacting our SDIRA custodian experts today!