The following questions represent common concerns that arise when discussing investments in non-traditional assets with Self-Directed IRA funds. It is not the intentions of Citywide or it’s affiliates to offer investment advice or to sell investments. What follows is a general discussion of the views of many professionals who deal in IRAs. It is not intended, and may not be relied upon, as an opinion or advice on any legal, tax or investment aspects or IRAs. As laws and rulings are continuously changing, we advise all IRA owners consult with an attorney prior to making IRA investments.

Over the past decade many investors have seen their traditional retirement investments return little to nothing. At the turn of the century the market took a downturn and many have yet to recoup their losses. Many people are looking for an alternative to investing in the volatile stock market but want to see higher returns than they can get out of CDs or annuities. One alternative is to take control of your money by putting it into a Self-Directed IRA (SDIRA).

SDIRAs are not a new concept, they have been around for years. Most people are not familiar with this concept and are thus skeptical. In fact, this technique of growing your retirement can be very effective and is widely growing in popularity. Some of the most common questions are covered below. Take a moment to review some of the FAQs about self directing your IRA. Then if you have more questions contact us.

“What is a self-directed IRA?”
In a “nutshell”, a SDIRA is a way for investors to use retirement funds to purchase investments. They are very similar to investing as you would traditionally in your retirement account. The main difference is that you have more control over how and where you invest. With a SDIRA you can not only invest in traditional investment vehicles, but you can also invest in non-traditional investments that are excluded by most administrators. Self-directed simply means you, the client, choose your IRA’s investments.

“Why haven't I heard of this before?”

Unfortunately you will not hear about this type of investing because your banker or broker is not familiar with them. Why, you ask? The answer is simple. Your investment advisor makes money when you buy a traditional investment product (i.e. stocks, mutual funds, insurance, etc.) They are simply not interested in having you buy a parcel of land, hold it for three years, and selling it for a 20% annual return (even if it is the best thing for you.) No margin, no mission! This is totally understandable from their point of view. They are in business to profit. You, however, are investing for the highest return regardless of whether your advisor gets to collect a commission or not! The fact is you have been able to buy real estate and other investments since the first day IRAs were created.

“What types of investments can I make with my IRA?”

The real question should be “What can you NOT invest in?” The IRS does not state what investments are acceptable, rather they have established what is not acceptable. You cannot invest in life insurance policies, collectibles or S Corporation. Other than that, it is pretty much open. Your IRA can buy raw land, rental properties, commercial properties, condos, race horses, discounted mortgage notes, tax liens, airplanes, along with all of the traditional investment vehicles you are familiar with and many, many other non-traditional investments. Real estate is by far the most common IRA investment vehicle we encounter. The possibilities are vast and it is important to have a good team in place to help you throughout the process.

“What do I need to do to get started with my SDIRA?”

The first step is to talk to a trusted professional about your options. Have your current IRA statements available. Once you determine whether self-directing your retirement is for you, you will need to move the funds from existing IRA accounts to a custodian or “roll over” your existing pension plan to an IRA with a custodian. Depending on your current custodian, such transfers or rollovers can take considerable time - as long as six to eight weeks. Sometimes investments are needed quicker than this. In order to speed up the process, you can take advantage of an “IRA to IRA” roll over. After funds are transferred, you will be informed by the custodian when you are “ready for action”.

For more information contact Citywide's Self Directed IRA Professional, Josh Turpin at 913-907-4656 or contact us today!  We would be glad to send you an informational package!