Important Information on Self Directed IRAs

One of the most exciting aspects of modern-day investing, especially for the average investor, is the advent of the self-directed IRA. Standard IRAs have been around for quite some time, and they offer individuals an excellent way to save for retirement. These retirement accounts typically are quite affordable, allow you to contribute a specific amount of money, and allow you a respectable return on investment. Unfortunately, standard IRAs can be somewhat limited in the types of investments you’re permitted to make. This can be especially troubling to an investor who’s looking to diversify the types of investments that they buy. Fortunately with a self-directed IRA, an investor looking to diversify can be as diverse as they could possibly imagine, while still keeping their investments within an IRA.

For example, when a self directed ira gold, silver and even real estate can be potential investment. With standard IRAs, you will typically get what the IRA provider offers. Usually, it’s a mixture of various different stocks from the different stock sectors, as well as mutual funds and sometimes bond funds. With a self-directed IRA, you can take the funds that you’re using to open up an IRA and you can purchase various different commodities that can bring a respectable return on investment.

However, it’s important to understand that there are different rules for self-directed IRAs, as opposed to standard IRAs. For example, when you invest in gold through an IRA, you will not be permitted to physically possess the gold until the IRA has reached maturity. If you fail to use a third party custodian for the gold that you purchase with your IRA funds, you could be violating the IRS’s rules on self-directed IRAs and you could be in for a rather stiff tax penalty, which would successfully negate any tax shelter benefits that IRAs provide.

There are also a number of other things to consider when it comes to the difference between self-directed IRAs and standard IRAs. However, if you like the concept of an IRA, and you want the freedom to invest in other commodities, a self-directed IRA may be something you should look into. There are many quality providers of self-directed IRAs, and a great deal of information that you’ll want to take a look at before you decide if this investment is right for you.