3 Top Reasons to Have a Self-Directed IRA
If you’re looking for greater control over your retirement funds and the flexibility to invest in real estate, private equity, or even crypto, it’s time to ask: what is a Self-Directed IRA (SDIRA)?
Unlike traditional IRAs, an SDIRA lets you invest in a wide range of assets beyond stocks and mutual funds. In this guide, we’ll explore the top 3 reasons to have a self-directed IRA—and how to get started.
✅ Reason #1: Unmatched Investment Flexibility
A traditional IRA limits you to conventional investments, but a Self-Directed IRA opens the door to more diverse and potentially higher-yielding options.
Popular Self-Directed IRA Investments:
- Real estate in a self-directed IRA (rental property, commercial buildings, raw land)
- IRA investing in rental property for monthly cash flow
- IRA investing in private equity, crowdfunding, or startups
- Tax liens in IRA as secured, high-interest investments
- Precious metals in SDIRA (gold, silver, platinum)
- Cryptocurrency in SDIRA, such as Bitcoin or Ethereum
This range of SDIRA alternative investments helps diversify your portfolio and reduce risk from market swings.
✅ Reason #2: More Control Over Your Retirement Strategy
With an SDIRA, you make the investment decisions—not a financial advisor or brokerage.
Depending on your financial goals, you can open either a self-directed Roth IRA for tax-free growth or a traditional SDIRA for tax-deferred compounding.
How to Open a Self-Directed IRA:
- Choose uDirect IRA Services, LLC to assist you
- Decide on the account structure—standard or an account with an accompanying Checkbook IRA
- Fund your SDIRA via contribution or rollover to a self-directed IRA
- Start investing in assets you understand
When comparing SDIRA vs typical IRA, SDIRAs win on the freedom and flexibility front.
✅ Reason #3: Tax Benefits & Strategic Compliance
A Self-Directed IRA still provides the tax advantages of conventional IRAs—but with more responsibility.
Know the Rules:
- Adhere to self-directed IRA rules to avoid disqualification
- Be cautious of prohibited transactions in an IRA
- Avoid dealings with disqualified persons in IRA (like family members)
- If your IRA uses leverage (e.g., mortgage on a property), be aware of IRA UBIT rules and UDFI
Also, make sure you’re contributing within SDIRA contribution limits. And if you’re self-employed, you might also consider a Solo 401(k) vs SDIRA for even more contribution room.
🔍 Choosing the Right SDIRA Custodian
Not all SDIRA providers are created equal. Look for custodians who are members of the RITA (Retirement Industry Trust Association), such as uDirect IRA Services, which follows the highest compliance and operational standards.
You’ll also want to compare services and fees when evaluating the SDIRA administrator vs custodian roles to ensure you’re getting the best setup for your needs.
🚀 Final Thoughts
The freedom to diversify, the control to make your own decisions, and the potential for significant tax advantages make SDIRAs a compelling option for many investors.
If you’re ready to take the next step, now’s the time to open a self-directed IRA and build a retirement strategy aligned with your goals.
uDirect IRA Services, LLC is here to help you build your retirement savings. We are not a fiduciary and we do not offer tax or legal advice. We do not recommend specific investments, rather we guide you through the process to self-direct your retirement savings into assets you choose. To get started, we offer a free consultation. Schedule yours HERE – To open an account, click HERE.
