Options That Pay Off: What You Can Invest in with a Self-Directed IRA

Planning for your retirement shouldn’t have to be scary, but sometimes it is when you have to think about budgets. And with so many different options for financing your life after retirement, how do you know what to choose?  A great way to simplify your options and make your choice clearer is to break down the complicated terminology. You can learn more about options like self-directed IRAs by starting with a few simple questions.

What is an IRA?

If you’ve heard the acronym over and over without really knowing what it means, then it might help to know that IRA stands for “Individual Retirement Account.” One popular misconception is that the “I” is for “investment,” and that’s not quite the case. Although IRAs are related to investments, the bottom line is that an IRA is actually a type of savings account you create for yourself. As you add money to the account over time, it can later be used to create investments by placing that money in things like stocks and bonds. Those investments can later be withdrawn to supplement your income during retirement.

Different Types of IRAs  

All IRAs are not created equal and the type you choose can make a big impact on your retirement, so it’s important to understand your options and determine which one works best for you. For example, you’ve probably heard of Roth and “traditional” IRAs. These are not the same as self-directed IRAs because they come with certain restrictions and eligibility requirements.

The biggest difference between Roth, traditional, and self-directed IRAs is what you can invest in. Other IRAs limit your investment opportunities to options controlled by the IRA broker, such as the previously-mentioned stocks, bonds, and mutual funds. While these options might be helpful, they are not the only choices available and being limited to these options can prevent you from maximizing your future income.

So, What Can you Invest in With a Self-Directed IRA?

The short answer is: a lot of stuff! Being free of broker-determined constraints like stocks, bonds, and mutual funds means that you’re free to invest in a range of options that will be wider and more profitable. For example, alternative assets include things like gold, real estate, and limited partnerships just to name a few!

The best part is just what it says in the name: this is a self-directed IRA, which means more freedom for you, decided by you. Administrators like The Entrust Group make it simple to find the investments you’re actually interested in. They give you the opportunity to take control of your financial future your way and grow your savings in a tax-advantaged account with more opportunities and fewer limitations.   


Now that you know a little more about IRAs, what makes them different, and what you can invest in, why not take a look at your plans for retirement and consider a self-directed IRA? It’s never too late to invest in the quality of your financial future. Just always remember to do some thorough research first of the advantages and disadvantages of investing.