Funding Your Self-Directed IRA

self directed IRA funding

Funding your self-directed IRA is a vital step in order to start investing in that alternative investment that you have your eye one. Remember, that alternative investment can be real estate, gold or some other investment of your choice.

You may be one of the few lucky ones that have hundreds of thousands of dollars saved in your bank account and you might be thinking that you want to take that money and deposit it into a self-directed IRA in order to fund that real estate investment you were planning on buying. Since a self-directed IRA is a retirement account there are certain rules to funding your account. We want to help make sure you are on the right track and can fund your self-directed IRA.

If you aren’t sure what all these words mean check out self-directed IRA rollover terminology broken down

The following are the main ways to fund your self-directed IRA:


A contribution is simply adding money to your IRA. This is typically done through a check or wire transfer from your bank account. There are yearly contribution limits to an IRA (The limit for 2014 is $5,500 or $6,500 if you are 50 and older). Because of these limits it typically isn’t the most popular way to fund your self-directed IRA. Contributions for 2014 have a deadline of April 15, 2015, in order to count as a contribution for 2014. For more information on contributions check out, The End Is Coming


A rollover is a much more popular way of funding your IRA. In a rollover, you take money from a qualified retirement account such as another IRA. The account holder takes the money and then has 60 days to rollover the funds into another IRA or in this case into your self-directed IRA. The issue with this type of funding option is that because you are actually receiving the cash from your IRA or another qualified account it acts as a distribution as is subject to taxes. As long as you rollover this money into a self-directed IRA or other approved retirement account you won’t be taxed.


A transfer is considered the best way to fund your self-directed IRA. It is the best because it is the safest and easiest way to do it. When doing a transfer the funds are never passed to you personally as the account holder. One of the biggest benefits of doing it this way is that there are no limits to the amount that can be moved from one IRA to another. You can do this as many times as you want as well. With other types like a rollover, there are rules to how many times you can do this yearly. You also don’t ever have to worry about this type of funding option being taxed. This is typically the fastest way to do it as well. If you are looking for your account to be funded with lots of cash fast this is the best option.

The above suggestions are the best and most popular ways to funding your self-directed IRA. For help in funding your account please contact us and we will make sure you know the best way to fund your self-directed IRA for your situation. To get your self-directed IRA funded fill out one of our appropriate forms.


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