Have you ever thought that you could do better in the market by investing your IRA funds yourself rather than trusting your IRA funds to a financial advisor? This is a common problem and one that can be very justifiable. There are many times that financial advisors just don’t put in the same effort as if it were their own money. Sometimes they just don’t have your best interest at heart. Many times you are the best steward over your own retirement and your retirement accounts. If you have had this problem before why not start investing your IRA yourself? If you aren’t comfortable doing all of it why not invest some of your retirement yourself?
The best way to start investing your own retirement into things you want is through a self-directed IRA with checkbook control.
The process of setting up a self-directed IRA with checkbook control is very simple to do.
Including the following:
- Setting up an IRA account. This can be done online here
- Completing a Transfer Request form that will be sent to your current custodian to request the funds. This form will be emailed to you upon completion of the IRA account but can also be found here
- Filling out an IRA LLC application. This application can be emailed to you upon request
- Once IRA funds have been receiving from your previous custodian you must fill out a direction form directing the IRA funds to be sent to the LLC. Here is the link to the Direction Form
- Once the Direction form is completed the funds can be wired to the LLC and you are free to choose the investment options of your choice
Once the IRA funds are in the LLC you are free to choose the investments of your choice. The most common investments that clients invest in through the IRA LLC are real estate, private placements, tax liens, trust deeds, loans, and other non-traditional investments.
Rules and limits
Keep in mind there are certain rules that apply to investing with self-directed IRAs. Prohibited transactions are one of the biggest things to be aware of when investing in your retirement account. Prohibited transactions apply to your investments inside of an IRA LLC as well. One of the biggest prohibited transactions that we see being abused is people trying to invest their IRA with related parties, also known as disqualified persons. A disqualified person includes you, your parents, and children, but in-laws are a gray area. To be safe I wouldn’t do any dealings with in-laws either. What this means is you or a related party cannot give or receive a benefit from your IRA LLC funds. All transactions need to involve nonrelated parties. Check out the following links for more information about prohibited transactions and disqualified persons.
If you have any more questions about the IRA LLC feel free to call, email, or comment below.
Author: Ben Barker, Self-Directed IRA Professional