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What are Self-Directed IRA Services?

Self-directed IRAs are gaining popularity among savvy investors and for good reason; they combine the tax-advantages of conventional IRAs with greater control over investment direction and a multitude of investment options. Investors need top-notch Self-Directed IRA services from experienced professionals to help them navigate the intricacies of Self-Directed IRAs and to take advantage of all their benefits.

Who Provides Self-Directed IRA Services?

It’s good to be aware that it takes a team of professionals with expertise in Self-Directed IRA investments to help you be successful. Self-Directed IRAs are a valuable retirement savings tool, but they also add some extra administrative steps, and it pays to have the right providers helping you to navigate them. The various providers that you may utilize to open and operate a Self-Directed IRA include:

  • Administrators that assist in opening and maintaining an account and perform functions related to the account’s administration.
  • Custodians that hold account investments on behalf of the account holder can issue funds and are licensed and subject to state and federal regulation.
  • Advisors: CPAs, real estate attorneys, financial advisors, and other professionals that may provide tax, legal, and investment advice.

It’s important to do your due diligence when choosing an investment and choosing the people who will help you facilitate that investment. Regardless of the services they are providing, they need to have the expertise to keep your investments compliant with IRS regulations. Be sure to know their level of experience and if they have a solid reputation in the industry.

The term “Self-Directed” is an industry term.  It merely means that you hold your funds with a Custodian that allows you to self-direct funds into alternative investments. The Self-Directed IRA account is similar to an IRA you may have now, meaning the same IRS rules apply regarding contribution and distribution rules.  It’s up to you to decide which investment is best for you. The level of service you want is also your choice, so be sure you know what your providers can and cannot do.

What Services do Self-Directed IRA Administrators Provide?

A Self-Directed IRA administrator is a valuable member to have on your team. They provide the support necessary for Self-Directed investments, and they take care of the paperwork related to the investments. That can be a lot of paperwork.  That’s why not all custodians offer Self-Directed or alternative investments.  It can be “clunky.” Remember, you direct the investment, but it is the administrator that can add efficiency to your process, or take it away.  That could be costly. An experienced administrator will get you from one transaction to another, quickly.

Let’s take a look at some of the self-directed IRA services an administrator may provide.

Basic administrative functions. An administrator manages the account opening process, completes the various paperwork requirements related to establishing and maintaining the account, and records account activities such as contributions, distributions, transfers, rollovers, and investment transactions. Administrators supply owners with account statements and investment reports and often perform the required IRS reporting.

Information and education. A good administrator knows that knowledge is the key to success and will typically provide useful resources and tools to help you make the most of self-direction in your account. It is especially helpful to receive ongoing education regarding how to stay compliant with IRS rules and regulations and preserve the tax status of your account.

Account management. Many administrators offer an array of tax-free or tax-deferred account types to fit individual needs and provide online access to account information. Administrators can provide assistance with purchasing alternative assets such as real estate, precious metals, and private equity investments. While they cannot hold an IRA’s assets, a good administrator will choose the right custodian in order to allow you to take advantage of every possible benefit of a self-directed IRA.

While administrators do not perform due diligence or provide tax or investment advice, they take many of the administrative tasks out of your hands, for Self-Directed investment account activity. This helps you focus on what’s important  –  making sound investment decisions.

Regardless of which Self-Directed IRA services you’re looking for, it makes sense to take advantage of professional guidance whether you only have a few questions or you feel like you’re in over your head. The purpose of the account may be self-direction, but with the right team in place, administrative help often goes a long way!

Click below to schedule a FREE strategy session with one of iPlanGroup’s administrative specialists.

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