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What is a Self-Directed IRA and How Does It Work?

The self-directed IRA program is straightforward: Take your money, invest in virtually anything you like, and direct the investment to avoid tax until retirement. Visit our website and learn more about gold IRA rollover.

This IRA is a special way to give you greater control over your finances. It allows you to invest in familiar assets, so the options are almost endless. You don't have to invest only in mutual funds, stocks or bonds.

A self-directed IRA allows you to invest in non-traditional investments like real estate and gold. You can also direct your contributions towards tax liens, private businesses, or other types of investment. In addition, you can enjoy asset protection as well as a variety of tax benefits that come with government-sponsored retirement programs.

Employee Retirement Income Security Act permits you to do so, provided that there is strict separation between your self directed IRA and personal funds. The assets cannot be mixed and you can not borrow money from your IRA. A custodian must be appointed to manage your IRA's transactions, according to IRS regulations.

Since the numbers of people who are self-directing their IRAs is not formally recorded, it's impossible to know what exact number they are. The Securities and Exchange Commission estimates that 2% to $100 billion of all IRAs in the United States were self-directed last year. This is because Wall Street's instability has caused investors to be disappointed.

Self-Directing Your IRA: The Tax Advantage

Tax is an important part of a selfdirected IRA rollover. The law permits you to transfer retirement funds from a deferred-tax retirement account (e.g. a 401 k) to your self directed IRA tax-free. It retains the status of a tax-free rollover to retirement funds but you can transfer it to a self directed IRA.

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