Should You Use A Self-Directed IRA To Save For Retirement?


 

Self-Directed IRAs can be used to invest in things like real estate, something traditional retirement accounts don’t allow.


SDIRAs can invest in anything but collectibles and like insurance. The freedom to invest in nearly anything makes SDIRAs an exceedingly potent way to save for retirement. However, this freedom comes with substantial risk for the under-prepared investor.


Self-Directed IRAs are, as their name implies, directly controlled by the account owner. This, along with the strict reporting requirements means that SDIRA account owners have to be extremely careful to stay in compliance. The consequences for falling out of compliance are harsh, as any prohibited transactions will terminate the account, potentially leaving you on the hook for all taxes, fees, and penalties.


Talk with your tax professional and any other financial advisors before considering a Self-Directed IRA.


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