Fraud Self Directed IRA
What are the potential sources of fraud in a self-directed IRA?
Let’s look at this in several parts.
What is a self-directed IRA?
A self-directed IRA is an Individual Retirement Arrangement (IRA) with a custodian that typically allows alternative investments. You, as the account holder, direct the investments of the IRA through the custodian.
The self-directed IRA puts you in the driver’s seat of investment. This gives you both freedom and responsibility in directing the investments. You have the freedom to invest your retirement funds into real estate and other non-traditional assets. You can invest in the areas you know best and are already familiar with. And who else cares more about your retirement savings than you?
But a self-directed IRA also gives you a fair share of responsibility. And this is where you need to be informed and careful.
Fraud in a self-directed IRA
As long as there are opportunities and freedom with retirement investing, there will also be those who seek to take advantage of other people’s funds. A recent survey found that fraud was often perpetrated through real estate and energy ventures. Many have lost a great deal of earnings through these proposed investments. Fraud schemes can come through television shows that seek to separate individuals from their hard-earned capital, resulting in a loss without recourse.
Real estate, while being a popular investment option, can be particularly vulnerable to fraud. Be careful and aware amidst talk of return on investment and rental properties. Scammers easily take advantage of this. Beware of rental property investments that are outside the individual option.
Retirement investing requires due diligence. Read the fine print, do your research, and trust your gut instincts. If it’s too good to be true, it probably is.
