Self Directed IRA Blog

It is so important for all of us to make sure we have a retirement saving plan and that we put that into force. Along with this plan it is super important to check that plan on a yearly basis and make sure that our retirement goals are still being met and that nothing has derailed that plan. I have written plenty of times about the things we should be looking at when doing that yearly checkup. If you would like that info again please checkout, “”. There is one thing that is way overlooked that you really need to worry about because it truly affects your retirement nest egg. You need to worry about the fees you pay in regards to your IRA.

Fees may not seem to have a huge impact on your account when looking at one year but looking at how fees affect your account over the course of decades starts to show just big of an impact the fees you pay make.

So how do fees add up? There are so many different ways that fees are charged and it really depends on your brokerage as to how you are charged. You may be charged in one or more of the following ways: Inactivity fees, transfer fees, account maintenance fees, minimum equity fees, trading fees, commissions and the list goes on. While you may have more ways you are being charged, the real question here is, “Do you even know what you are being charged?” If you do not know for what you are being charged and how much then now is a great time to figure it out.

One of the biggest ways brokerages charge is through a fee based on percentage of assets. Plenty charge trading fees and plenty don’t, again it depends on your brokerage. The average advisory fee is 1.24% but what does that get you? You need to know because it varies greatly by brokerage. That is only the advisory fee. It doesn’t count the fee to actually be invested in what you are invested in. Since the most common types of investments inside an IRA are stocks, mutual funds and bonds. Most of these investment options actually have a cost associated with them. For instance, those of you who have advisers who have invested your funds in mutual funds are costing you an average 2.02% (that is adding up all fees you pay including the advisory fee and fund fees.)

A 2.02% is a significant cost. This is especially significant when there are far cheaper options out there. That is where we come in. While there are plenty of other ways to lower your fees there are few options that are as low as a self-directed IRA. One reason a self-directed IRA is so much cheaper is because you are the adviser. You are the one deciding what investments you want in your portfolio. If you want to invest in real estate, gold, private placements or any other sort of investments then you can.

The fees we charge for a self-directed IRA are a simple $275 a year. It doesn’t matter how much your account is worth, it is charged a yearly fee of $275. Checkout our fee breakdown for a more indepth look at our fees. To give you an idea of how much fees can affect your account Below are two an account that starts out with $50,000 and is invested for estimate I decided to show you what the difference is between an account that pays the average adviser and mutual fund fee vs one that pays a significantly lower fee of say, .3%, almost a 1/3 a percent.

• IRA Account with a $50,000 initial investment making 7% a year for 20 years with a 2% fee for adviser and funds will have roughly $132,665 after 20 years.
• IRA Account with a $50,000 initial investment making 7% a year for 20 years with a .3% fee for adviser and funds will have roughly $182,919 after 20 years.

What do we learn from this? The account with a significantly lower fee ends up having a significantly higher dollar amount after 20 years. This is the obvious and the extra umph that you should hopefully realize is, the amount you are paying in fees really does matter and it can have a huge long-term affect.

A self-directed IRA can help to truly minimize your fees and maximize your profits. Learn more about a self-directed IRA or open an account now.

Author: Nick Barker

I imagine the majority of U.S. citizens have heard of an IRA. I also imagine that most have not heard of a self-directed IRA. A self-directed IRA gives you the ability to invest in non-traditional investments. In all reality though a self-directed IRA is the same thing as a regular IRA. Because they are the same thing and the only real difference is what your custodian allows I wanted to explain a few things that you need to know about an IRA that you may have not known.

You Can Invest In So Much More

Most IRA accounts are invested into stocks and bonds, but they don’t have to be. What most of you don’t know is that a self-directed IRA is really just a custodian (Morgan Stanley, Merrill Lynch, Wells Fargo, Etc) that allows you to take full advantage of your IRA and invest how you want with you. Most custodians only allow for certain types of investments, like stocks and bonds. Why is that? More than likely it is because they make more money by pushing other investments. Or it could simply be because it is not in their wheelhouse. The truth is though with an IRA you can invest in just about anything. You can invest in real estate, gold or even private placements.

You Can Pay For College With An IRA

You can without penalty withdrawal funds from your IRA to cover the cost of tuition. There are a few issues to be aware of when doing this though and that is why it is important to talk to a tax attorney or CPA when dealing with this.

Whether this information is new to you or not you can gain from this knowledge. What you can gain from this is that you can do more with your IRA than you probably are doing. If that means using your funds for things like education or if it means investing in things other than stocks and bonds. You can find a way to maximize your IRA for what works for you.

Author: Nick Barker

Since the financial crisis of 2008 things have been pretty peachy for the financial markets. It doesn’t mean though that you can sit back and rely completely on the U.S. government or even your current savings to help you get your retirement savings to where they need to be for retirement. There are bound to be times in the future that won’t be as bright as the past few years since the 2008 crisis. Our retirement portfolios need to be ready for anything that may come. The following are a few tips to help you make sure that your financial future is bright.

Be In The Know

It is very important to know where you are at. It is hard to get to where you want to be without knowing where you are currently at. What does this mean? It means you need to figure out what your net worth is (current assets minus current debts). If you can do this at least once a year then you will be able to know if you are truly making progress. In other words your net worth should be increasing year over year for the most part.

What Are Your Habits?

If you are like the majority of Americans your net worth will not nearly be what is should be, especially for retirement. You also probably don’t keep track of your spending. It truly doesn’t matter if you live paycheck to paycheck or if you make enough money to spend as much as you wish. If you start tracking how much you make, spend and where you spend then you will be able to find a way to start saving. Saving is key to a bright financial future. More on your spending

Set Goals

Typically once you find out what your habits are you will need to set some big goals in order to start saving for your bright financial future. You should have multiple goals. Goals that are short-term and goals that are long-term. Your short-term goals should help you to achieve your long-term goals. You must check up on your goals a few times a year or else they will get lost and forgotten. Forgetting about your financial goals will more than likely mean that you will forget to do what you need to do to create your bright financial future for retirement. More on retirement goals

Get Implementing

Once you know where you are currently at, what your habits are and have set your goals you then can start pushing for that bright financial retirement.

For almost all of us it means we can start investing in our retirement with a 401k, IRA or both. One of the best tips of advice would be to create a very diversified portfolio. One of the best ways to do this is through a self-directed IRA. An SDIRA allows you to take control of what you invest in by choosing your own investments. You can invest in things outside the stock markets as well. Investments like real estate, gold, private placements, etc. These investments are great because they can all be done inside of an IRA or 401k. You get the tax benefits that come with a retirement accounts.

As we all know things are never as easy as set it and forget it. Times change and things happen that mean we may need to change our strategy. It is wise for us to take some time every year to go back over these steps and do our own audit of our situation. Some years it may mean working a little harder to save more. Other years it may mean we have a bit extra for a little family vacation. Whatever you do, don’t forget to start today to create your bright future for your retirement.

Author: Nick Barker