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Self-Directed IRA Services

 

What is an IRA?

An Individual Retirement Arrangement (or IRA) is a retirement plan account that provides some tax advantages for retirement savings in the United States. There are different types of IRA’s which include, Traditional, Roth, Simple, SEP and Inherited IRA accounts. Traditional, Simple and SEP IRA’s hold pre-tax funds. A Roth holds after-tax funds. An Inherited IRA holds funds from that came from a different person’s retirement account when you were the beneficiary of their retirement plan. There are different contribution limits for IRA’s. To make contributions to an IRA, a person must have earned income from a W-2 job or self-employment. Inherited IRA’s cannot accept new contributions. For more information on contribution amounts please see Contribute to Account

What is a Self-Directed IRA?

A Self-Directed Individual Retirement Account is an IRA that allows the account owner to make investment decisions and investments on behalf of the retirement plan. A Self-Directed IRA company does not make suggestions on types of investments or people/businesses to invest with. They do not provide an opinion on whether it is a good investment. The account holder is responsible for finding the investments they want to participate in and doing the due diligence to make themselves comfortable it is an investment that offers the safety and return of profit they want. The IRS company will review the investment documents to make sure it is investment that is being made in the name of the IRA and whether it is an asset they are willing to hold. To open a Self-Directed IRA please see Open an Account

What Types of Investments are Allowed?

The IRS does not provide information on what is an allowable investment. The IRS states what is not allowed. The types of investments are almost limitless. Allowable investments include real estate, both commercial and residential, making secured or unsecured loans to a company or person, oil-gas-energy investments, private stock offerings, private placements, and more. It is important to understand that the IRA company does decide what they are willing to hold. You should discuss the type of investments you are interested in before choosing the IRA company to hold your funds. For more information on allowable investments, please see ​IRA Investment Options. ​

What Investments are Not Allowed?

Most companies that offer IRA’s limit investments to publicly traded stocks and bonds. However, that is not an IRS limitation. The IRS says that IRA’s cannot hold life insurance and collectibles, like cars, paintings, guns or wine. There are also prohibited parties that your IRA cannot interact with. These include the account holder, their spouse and their lineal ascendants and descendants. It also applies to fiduciaries and individuals offering services to your IRA.  If you engage in a prohibited transaction, your entire IRA account will be distributed to you. Please visit our​ IRA Rules page for more information regarding the IRS rules for IRAs.

Attention:

uDirect IRA Services staff is working both from home and from our offices in response to COVID-19. Rest assured, we are fully operational and ready to help with your retirement needs.