How Self-Directed IRAs Open the Door to Alternative Investments

Take a gander at the stock market recently? It isn’t all pretty. And when you hold 100% of your retirement in stocks, it can be downright gut-wrenching to see the volatile moves in the market. But for people who hold alternative assets—think real estate and precious metals—there’s a little less worry. There’s especially less worry if they use a retirement account to protect those assets. Using Self-Directed IRAs is the key here, because it means you can open the proverbial door to alternative investments. Want to know how it works? Let’s explain in greater detail.

How Self-Directed IRAs Open the Door to Alternative Investments

When it comes to retirement planning, many people think of traditional stocks, bonds, and mutual funds. That’s the usual game plan. But the truth is, these options aren’t the only way to grow your retirement savings. By opening a Self-Directed IRA, you can invest in assets that might not be available through standard retirement accounts—things like real estate, precious metals, and even private companies.

Accessing Real Estate with a Self-Directed IRA

Real estate is one of the most popular alternative investments for a reason. It’s tangible, it can appreciate over time, and it often generates income through renting. With a Self-Directed IRA, you can buy real estate directly within the account—no need for a third party. Plus, any rental income or capital gains generated by the property go back into the IRA, growing your retirement savings tax-deferred or tax-free, depending on the type of IRA you have. Want tax-free retirement distributions later in life? You can use a Self-Directed Roth IRA, for example.

This strategy gives you a potential edge over other investors who rely solely on stocks and bonds. You can invest in single-family homes, multi-family properties, commercial real estate, or even raw land. However, there are rules you have to follow, like not using the property for personal benefit. But with the right management, real estate in a Self-Directed IRA can serve as a strong income-generating asset that diversifies your portfolio. Or you can make it the focus of your retirement strategy, especially if you have a lot of real estate investment experience and want to put it to good use.

Precious Metals and Other Alternatives

Real estate isn’t the only option. Precious metals, like gold and silver, are another great way to diversify. They’ve been used for centuries as a hedge against inflation and economic uncertainty. In fact, many investors turn to gold especially when the stock market is volatile. A Self-Directed IRA allows you to invest in gold, silver, platinum, and palladium while benefiting from tax advantages.

Beyond real estate and precious metals, Self-Directed IRAs also give you access to other alternative assets, such as private equity, tax liens, and a lot more.

Interested in getting started? It’s not as confusing as it may sound at first. You simply have to open an IRA with a Self-Directed IRA administration firm, fill out the paperwork, and start looking for alternative investments that catch your eye. You do have to know the rules about these investments—like keeping metals in an insured approved depository—but other than that, you’ll be good to go.

Interested in learning more? Reach out to us here by dialing 866-7500-IRA.