A Self-Directed IRA LLC could be exactly what you need if you want to diversify your retirement portfolio, especially for asset classes not included in traditional IRA investing.
This is a good option to consider if you want:
1. Tax-deferred growth
One of the biggest advantages of traditional IRAs is that your gains are tax-free until you make a withdrawal. You get the same benefit with a Self-Directed IRA LLC. Taxes will be deferred on any income or returns from investments through the account, and only distributions are liable for tax.
2. More investment choices
Traditional or Roth IRA funds are usually invested in stocks, bonds and mutual funds. Unlike traditional investment vehicles, a Self-Directed IRA LLC allows you to choose from a wider range of asset classes. You can use a self-directed IRA to invest in real estate, precious metals, tax liens or even an unrelated business.
3. Portfolio diversification
Choosing different types of investments is the best way to secure your retirement accounts, and a Self-Directed IRA LLC allows you to do that more effectively. With a larger variety of asset classes to pick from, you can allocate funds to IRA real estate, alternative investments and more.
4. Greater access to funds
If you want to access traditional IRA accounts for an investment, you have to wait for the IRA custodian to approve your request. With time-sensitive investment opportunities, any delay in this process could mean losing out. However, a Self-Directed IRA LLC offers you complete control.
5. Convenience and efficiency
You can make investment decisions faster and more efficiently with a Self-Directed IRA LLC. For instance, if you’re thinking of investing in real estate with your IRA funds, all you need to do is set up an electronic balance transfer or write a check from the IRA associated bank account.
6. Limited liability protection
Your investments are protected from attack with a Self-Directed IRA LLC, since your liability is limited. For instance, if you invest in IRA real estate, the IRA assets held outside the LLC are shielded against claims resulting from design or construction defects in your real estate investment.
7. Protection against creditors
If you’re filing for personal bankruptcy, your Self-Directed IRA LLC will shield up to $1 million of your IRA assets. Your Self-Directed IRA LLC investments will also be protected against creditor attack outside of bankruptcy in most states, so you can safeguard your retirement.
Factors before choosing a Self-Directed IRA LLC
These three factors will help you decide if a Self-Directed IRA LLC is a good fit:
1. Types of investments
If you’re planning to purchase real estate, tax liens or other time-bound investment opportunities, a Self-Directed IRA LLC is ideal. For long-term passive investments such as precious metals, a self-directed IRA may be better.
2. Transaction frequency
If you will often be making investments or transactions for active assets such as auctions or hard money loans, a Self-Directed IRA LLC will help you save money on transaction costs, review fees, and other expenses.
3. Account setup costs
Setup and transaction costs depend upon the self-directed IRA custodian handling the account. Remember, in addition to custodian fees and setup costs, you may also be charged for storage, insurance or wire fees.
If you aren’t sure whether a Self-Directed IRA LLC is the right way to meet your retirement goals or want to know about tax compliance, prohibited transaction types and other IRS rules, consult a financial advisor or tax professional.
(Featured image by DepositPhotos)
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
Rental real estate seen as a safe haven in France
The crowdfunding platform My Korner Shop has an original model of crowdfunding, investing in rental real estate, in this case...
UN calls for the cancellation of $236 billion in African debt
In response to the pandemic and the economic "tsunami" affecting developing countries, The United Nations Conference on Trade and Development...
A sharp drop in Italy’s GDP can no longer be avoided
Confindustria’s forecasts showed that a sharp drop in Italy’s gross domestic product (GDP) is now inevitable. The estimates are based...
Genfit is adapting its activities in accordance to the coronavirus pandemic
Biotech companies worldwide are trying to find a vaccine to halt the coronavirus pandemic. The French Group Genfit announced that...
Blockchain technology can help the energy industry be more efficient
BlockApps has entered into a partnership agreement with the consulting firm Optimum to develop block solutions for tracking how energy...
- Featured6 days ago
Why should banks and FinTech operators ally?
- Crowdfunding6 days ago
Several organizations accept donations in cryptocurrencies to fight the pandemic
- Biotech6 days ago
Italian biotech companies entered the race to find a vaccine against COVID-19
- Africa6 days ago
COVID-19 and the violent fall in oil prices wreak havoc on Africa’s economies