If you’ve ever pondered over the realm of self-directed retirement accounts, you’re not alone. The concept can seem intricate, but fear not, as we’ve compiled a set of frequently asked questions to illuminate this financial landscape.

  1. What is the Purpose of these FAQs?

These FAQs aim to educate you on your responsibilities as the owner of a Self-Directed Individual Retirement Account (SDIRA) and the role of a custodian/administrator.

  1. What is an SDIRA?

A Self-Directed IRA empowers you to handpick and manage the assets within your retirement account, spanning from private equity to real estate and beyond. Crucially, all decisions regarding your SDIRA are yours to make or assign to a designated third party.  You can also self-direct a solo 401(k).

  1. What is a self-directed IRA custodian?

An SDIRA custodian is a qualified individual who safeguards the assets within your IRA as per your directives. While they maintain custody, they refrain from offering advice, solely executing your instructions.

  1. What does an SDIRA custodian/administrator do?

The custodian facilitates a multitude of tasks, including processing agreements, managing contributions, processing withdrawals, and reviewing for compliance with tax regulations.  The ultimate responsibility for compliance lands with the account holder.

  1. What can’t an SDIRA custodian/administrator do?

They cannot sell investments, offer advice, or endorse investments or advisors. The responsibility for due diligence and compliance rests with the account holder.

  1. What does an account holder do?

As the account holder, you select the asset, provide investment instructions, conduct due diligence, monitor assets, and ensure compliance with regulations.

  1. What to do before making investments in a SDIRA?

Prior to investing, conduct thorough research, consult with financial and legal advisors, and check relevant regulatory websites.

  1. Can I sell real estate I own to a SDIRA?

No, as it presents a conflict of interest and regulatory concerns. The roles of administrator and promoter must remain separate.  Your account is not allowed to purchase an asset you personally own.

  1. Can more than one type of investment be invested in with an SDIRA?

Absolutely. SDIRAs offer flexibility, allowing investments across various sectors, from real estate to private stock.  There is no limit to the number of assets that can be held in one account.

  1. Can a current retirement account administrator refuse a rollover?

No, they cannot refuse a rollover, though the process may take time.

  1. How long does it take to set up a new SDIRA?

Setting up a new SDIRA typically takes a day or two, while rollovers may require more time for fund transfer and clearance.

  1. How many Americans have money in retirement accounts?

According to Yahoo Finance, almost half of Americans don’t have a dedicated retirement savings account, according to the Federal Reserve’s 2022 Survey of Consumer Finances. The survey, which includes the latest government data, reveals only 54.4% of American families reported having dedicated retirement accounts such as a 401(k) or IRA.

  1. Can a SDIRA invest internationally?

Yes, you can invest in real estate and other assets outside of the United States with your self-directed IRA. Many of our clients have expressed interest in diversifying their portfolio by including real estate assets in countries like Panama, Costa Rica and Mexico; just to name a few.  The issue with this is the FBAR rules.  Per the Bank Secrecy Act, every year you must report certain foreign financial accounts, such as bank accounts, brokerage accounts and mutual funds, to the Treasury Department and keep certain records of those accounts.

  1. Why should I build this into my real estate branding and marketing plan?

Capitalizing on the growing interest in SDIRA investing can attract lifelong customers and bolster market share.  There is a $40 Trillion pool of retirement savings in America and self-directed investors can use those funds for real estate deals.

  1. Where do I find SDIRA leads for real estate?

Seek leads from past clients, marketing efforts, lead lists, referral partners, and real estate investment clubs.

  1. Can a Self-Directed IRA be opened online?

Yes, visit platforms like uDirect IRA to initiate the process online or seek assistance from knowledgeable specialists via phone.  You can reach us at (866) 447-6598 or send us an email at info@uDirectIRA.com

Armed with these insights, navigating the world of SDIRAs becomes less daunting. Whether you’re eyeing real estate ventures or exploring alternative investments, understanding the nuances of SDIRAs is paramount to making informed financial decisions.