Investor Education on Self Directed IRAs

Jun 2, 2023
Est. Read Time: 3 minutes
investor education 2019

Getting started as an investor can be challenging. With a solid “investor education” you could be rolling in the greenbacks in no time.


One topic that has risen in popularity is that of Self Directed IRAs. This investment tool is a viable opportunity to grow your retirement while offering greater control and flexibility.


What Is a Self Directed IRA?

A Self Directed IRA is similar to classic brokerage firm IRAs. They are investment vehicles that make it possible to grow your money tax-free (or tax-deferred) to see the benefits of compound interest over time and maximize growth. What makes a Self Directed IRA so appealing to investors is that the available investment options are far wider and give the IRA owner more control.

What Are the Benefits of a Self Directed IRA?

The main benefit of a Self Directed IRA is that you can truly diversify your portfolio and invest in various markets including real estate, private lending, precious metals, life settlements and even a business. In other words, any investment you believe is good for your future.

How Much Money Can You Put in a Self Directed IRA?

This year, the maximum personal contribution for a Self Directed IRA is $6,000, but if you’re over the age of 50 that amount rises to $7,000. Likewise, a SEP IRA allows you contribute up to $57,000. You can also transfer funds from another IRA or old employee plan such such as a 401(k) 403b or even a TSP. There is no transfer limit.

Can You Buy Investment Real Estate With a Self Directed IRA?

Self Directed IRAs can be used to purchase all forms of real estate including rental properties such as single or multi-family homes, Airbnbs and even mobile homes. Investors use these special IRAs because they can buy, sell and even flip properties and move funds between projects and still maintain the tax-deferral status.

Are Self Directed IRAs Allowed Under IRS Rules?

Self Directed IRA are allowed under the IRS rules. Since the 1970s, Self Directed IRAs are completely legal just like the classic IRA.

How Does a Self Directed IRA Investment Work?

The first step is to work with a qualified company like IRA Club. IRA Club will help you establish and fund your account. Once you identify a solid investment, perform due diligence, and provide the required paperwork,  IRA Club will send out the funds. Your Self Directed IRA is now the owner of that identified investment. Investors are then responsible for managing their account. The IRA Club is responsible for the administrative work. You can review the process that the IRA Club takes for setting up a Self Directed IRA. Most importantly, IRA will walk to through every process.

What Can You Invest in With a Self Directed IRA?

A Self Directed IRA cannot invest in life insurance or collectibles. Clients of IRA Club have a variety of investment options, such as real estate, structured settlements, life settlements, private placements, cell phone towers and even wind turbines. There are hundreds of investment opportunities. Think outside of the box, however, invest in what you know.

Can a Self Directed IRA “Partner” With Another IRA or Person on a Larger Investment?

One of the most valuable benefits and biggest advantages of a Self Directed IRA is that they can be used to partner with another person to make a larger investment. For example, your friend has found a great investment opportunity with the potential for a generous return. The project, however, requires $150,000 but your friend only has $90,000. Your IRA can invest the other $60,000 for 40% ownership of the deal ($60,000 / $150,000 = 40%) and a proportionate share of the earnings in the future!

Can You Withdraw Money From a Self Directed IRA?

Of course! The money is yours, but remember that you will pay taxes and a 10% early distribution penalty tax if you take the funds out before age 59 1/2. It is not advised to take out money early from your IRA. For those who need to withdraw from their account, simply fill out a distribution form.

Why Don’t More People Use Self Directed IRAs?

More people don’t consider a Self Directed IRA because they simply don’t know that the option is available. While users of these investment options tend to want more control over their portfolio and more options into what they can invest in, anyone can do it.

Considering Adding a Self Directed IRA to Your Investing Portfolio?

In conclusion, Self Directed IRAs allow for more investment options. IRA Club is one of the most established and trusted names in Self Directed IRAs. Reach out to a member of our team today!


For information about the Self Directed IRA or Solo 401k, call IRA Club at 312-795-0988

IRA Club offers no investments, products, or planning services. Therefore, please consult your attorney, tax professional, financial planner, and any other qualified person before making any investments.

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