Checkbook IRAs: IRAs Get Sexier
Back in 2012, Mitt Romney has gotten lots of attention when it is revealed that he has as much as $100 million saved up in his IRA. Another interesting fact that less people know about is that his IRA is not invested in stock and bond, but a wide variety of private partnerships. This is an important feature of self directed Checkbook IRAs, and the reason why IRA accounts are gaining popularity.
Flexibility of Checkbook IRAs
The article from Wall Street Journal explained why this is such an important benefit that could help investors increase their savings significantly. The ability to hold investments other than stock and bond allows investors to “be creative”. Owners of Checkbook IRAs are allowed to and have been known to explore very non-traditional investment options, ranging from real estate to fishing rights, precious metals to Koa trees. Virtually any legally available investment choices are permitted except for collectibles. For example, the video explained, IRA accounts can hold cattle but comic books, artworks, or rugs are all out of question.
Although the opportunities are wide open, investors are also recommended to do their homework before making their decisions. Investing in the right assets at the right time can create a healthy return into the retirement accounts, but making hasty decisions can negatively affect Checkbook IRAs, as with any other investment accounts. There are also a few things to considered when making the switch to a self directed retirement account.
Things to consider:
1. Potentially higher fees: Compared to a regular IRA, which can be set up for minimal cost, a self directed checkbook IRAs might cost more to set up and maintain. In order to make the most cost effective decision, make sure to ask your plan provider about all the fees and costs involved.
2. Understand Prohibited Transactions: Even with permitted investment choices, an investor can still engage in a prohibited transaction without knowing it. By doing so, they can trigger hefty penalties or tax charges from the IRS. To avoid this, plan participants of self directed retirement accounts are recommended to study the rules and regulations carefully, and get professional help when in doubt.
3. Watch out for additional paperwork to file with your custodian: As the article warns, although some IRAs allow flexible investment choices, in order to make the investment, account holders would have to go through a ton of paperwork to get approval from their custodian. This is not necessarily true with a Self Directed IRA LLC, when the account holder can take control without a custodian. This way, investments and transactions can be completed as easily as writing a check, hence the name Checkbook IRAs.
Having a truly Self Directed IRAs can give you many benefits, however, it can only be true with the right account from the right provider. For example, to avoid the high fees, prevent prohibited transaction violation, or eliminate custodial procedure, look for a plan provider who offers competitive pricing, free consultation, and a truly self directed checkbook account.
Read full story here: IRAs Get Sexier
Related Search Terms:
- Best self directed ira company
- Setup checkbook ira
- Best self directed ira(s)
- Self directed retirement accounts
- Benefit of a self directed ira llc
