Hats off to you for making the decision to utilize a self-directed IRA account for your retirement investments, as it indicates your willingness to venture into alternative assets and retirement methods that the average investor may overlook.

Now that you’ve made that choice. It’s time to decide which self-directed IRA company is the right one for you. Fortunately, we here at Sophisticated Investor have taken the liberty of vetting and combing through no fewer than 35 self-directed IRA companies.

After conducting extensive research and thoroughly vetting various options, we have compiled a crucial checklist of factors to consider when selecting the ideal self-directed IRA provider.

Things to Look for When Choosing a Self-Directed IRA Company

When exploring self-directed IRA options for you, we initially took into account the evaluations and opinions of other review sites and rating platforms regarding the same companies. Our assessments encompass ratings obtained from reputable sources like the Better Business Bureau, Google, Yelp, BirdEye, and Trustlink, which emerged during our searches. Considering the significance of word-of-mouth in advertising, it is essential to factor in these companies’ online reputations before finalizing your decision.

Fee structure is another crucial factor to consider when making the appropriate choice. Any financial institution that handles investments for individuals will generate profit by imposing fees. Several fees are commonly imposed by self-directed IRA companies. If you choose to close your account, most companies will require a minimum fee of $150. Additionally, a fee of five dollars is typically charged for reprinting essential documents, and a minimum of $30 is charged for wire transferring funds out of your account. Nevertheless, there are numerous variations. Some companies impose fees based on a percentage of your account value, whereas others charge fixed amounts for any action taken within an account.

Investors must not overlook the importance of considering the specific asset classes, types of investments, and account types that align with their individual requirements, even when they are ready to proceed. While certain options like Traditional or Roth IRA accounts are widely available, others are exclusive to particular self-directed providers. It is worth noting that not all self-directed IRA providers support investments in digital currency, for instance.

In concluding these reviews, we evaluated the level of satisfaction that self-directed IRA companies aim to achieve for their customers through their customer support. The fees charged by these companies and the customer review ratings they receive online often serve as indicators of their commitment and empathy towards delivering quality support to their customers.

When selecting the ideal self-directed IRA company for you, it is imperative to take into account all of these factors. After reviewing this summary, you are welcome to explore comprehensive evaluations of each provider.

Ratings and Customer Reviews

After thoroughly examining various customer review and rating platforms for IRA companies, we found that Google business profiles and Better Business Bureau profiles played a crucial role in consolidating information. Kingdom Trust Company emerged as one of the leading IRA websites, considering our analysis of numerous reviews and profiles. The company’s management of over $12 billion in assets is a testament to their credibility.

The company possesses an outstanding reputation for delivering excellent customer support and receiving positive reviews. Additionally, it serves as a guardian for various alternative investment options, such as precious metals, real estate, and digital currencies, which are highly appealing to a wide range of individuals nowadays.

When evaluating self-directed IRA companies based on customer reviews and ratings, we took into account the presence of ratings on third-party websites, the ratings themselves, and the opinions expressed in customer reviews. Be assured that we thoroughly assessed all these factors and identified numerous suitable options for your investment needs.

Fees

In terms of fees, the initial cost can vary. Majority of IRA companies require a minimum introductory fee of $50 when opening an account, and an annual maintenance fee of at least $195. However, it is crucial to focus on how these fees are administered by different companies. Some companies charge their fees quarterly, while others charge annually. Additionally, there are companies that choose to calculate fees based on percentages and the value of the account. Charging fees per asset or per transaction is also quite customary.

It is important to mention one additional point about American IRA. Instead of charging fees based on assets, quarters, or annually, the company provides two account options that include a predetermined number of transactions per year. The basic account allows for fewer transactions while the premium account offers more. This fee structure is distinct and not offered by any other self-directed provider.

It is important to remember that certain companies mentioned above provide investors with the option to choose between paying based on the account value or the number of assets. Certain companies even offer a combination of both payment methods. When deciding on the most suitable fee structure, consider the number of investment options you desire and your frequency of deposits and withdrawals into your IRA account.

Account Types and Investing Options

Although a particular fee structure may yield higher savings than any other IRA provider, it is crucial to factor in the desired account types or investment options before selecting the company to collaborate with. Numerous self-directed IRA providers present a solo 401(k) plan as a viable retirement option, unlike several other competitors.

Similarly, while some self-directed IRA providers offer assistance in exploring digital currency investments like Bitcoin for your retirement, a majority do not. If you are considering a self-directed IRA plan, it is possible that you are also interested in establishing a registered education fund for your children or investing in real estate and renting it out via a timeshare arrangement or on platforms like AirBnB. However, it should be noted that only a few self-directed IRA providers provide these options, whereas the majority do not.

Customer Support

Similar to our customer reviews, we did not solely evaluate customer support by considering whether a specific self-directed IRA provider has a live chat feature on their website. Although many providers do offer this, the primary focus of customer support is to enable investors to ask questions, receive accurate responses, and have a sense of dealing with knowledgeable individuals.

Once again, Kingdom Trust Company is the preferred choice due to its excellent overall rating. Additionally, Broad Financial and Camaplan IRA are also highly regarded by us.

5 Reasons to Consider a Self-Directed IRA

Similar to a traditional IRA, a self-directed IRA allows investors to create wealth for their retirement while receiving tax benefits.

Self-directed IRAs stand out due to their ability to provide individuals with the freedom and flexibility to broaden their investment options beyond the traditional choices of stocks, bonds, and mutual funds.

Five potential benefits of a self-directed IRA

1. With a self-directed IRA, you can take control of your financial future.

Who would be more suitable to determine how to achieve your goals in retirement than yourself?

By having a self-directed IRA at Equity Trust, you have complete autonomy over your account’s decisions, allowing you the liberty and versatility to invest in what you are knowledgeable about and feel most at ease with.

Similar to other IRAs, a self-directed IRA is not associated with an employer, unlike certain retirement plans such as 401(k)s, 403(b)s, Thrift Savings Plans, pensions, etc. Instead, it serves as your personal retirement account with more diverse investment choices.

If you decide to switch jobs, there is a chance that you can transfer your previous employer’s 401(k) or other qualified plan to a self-directed IRA, allowing you to consistently save and invest for retirement no matter where your life and career take you.

But you don’t have to change jobs to open a self-directed IRA. It’s also possible to have an IRA in addition to a 401(k), pension or other employer-sponsored plans you may already have.

You don’t have to be alone when it comes to being “self-directed.” It is encouraged for you to collaborate with a reliable advisor, CPA, or financial professional when making decisions regarding your retirement planning and investments. With a self-directed IRA, you have the power to choose the method that suits you best while maintaining control.

2. Self-directed IRAs allow you to invest beyond the stock market with more investment options.

Equity Trust’s self-directed retirement account sets itself apart from IRAs or other qualified retirement accounts at different financial institutions by offering enhanced liberty and flexibility to invest in a diverse range of asset classes, including both alternative and traditional options.

A considerable number of investors are unaware that they have more options beyond stocks, bonds, and mutual funds. They can actually opt for their IRA to invest in various alternatives such as real estate, notes, private equity, precious metals, private stock, and numerous other investment opportunities.

The investments that are prohibited are only identified in IRS Publication 590.

Collectibles (such as art work, rugs, antiques, gems, stamps, certain coins, etc.)
Certain Precious Metals*
Alcoholic beverages
Life insurance policies

However, there is one exception; a retirement account is permitted to contain bullion made of gold, silver, platinum, and palladium as long as they satisfy the required fineness standards.

As long as the retirement plan follows the guidelines set by the IRS, all other investment types are usually allowed. For further details, refer to the IRS Publication 590 and Internal Revenue Code 4975.

3. Self-directed IRAs can provide tax advantages.

If the IRS rules are adhered to, a self-directed IRA or qualified retirement account can offer various tax benefits. Two primary types of IRA, namely a Traditional IRA and a Roth IRA, possess distinct qualities and tax advantages. To obtain information on both accounts, refer to the comparison chart.

Funds and investments in both Traditional IRA and Roth IRA continue to enjoy tax advantages until withdrawn from the account once the account holder reaches the age of 59½.

Any income, profit, or growth resulting from investing in a self-directed account is tax-free and does not contribute to your taxable income for the year, as it all goes directly back to your IRA.

4. Self-directed IRAs can serve as an untapped source of investment capital with the potential to positively impact communities.

Another advantage for individuals involved in real estate investing, running their own businesses, or investing in non-traditional assets apart from their IRA is that they can leverage IRA, 401(k), or other qualified retirement funds (belonging to themselves or others) to obtain additional capital for their business ventures or investment prospects.

There is a vast amount of capital in retirement plans, with over $12 trillion invested in IRAs nationwide.

If investors become aware of self-directed retirement accounts and collaborate with an advisor or financial expert to assess compatibility, they might gain access to the vast multi-trillion-dollar IRA market.

In addition to its main objective of constructing tax-advantaged wealth for retirement, a self-directed IRA has the potential to bring about positive effects on others through its investments.

Equity Trust clients have demonstrated remarkable achievements through their retirement accounts, benefiting both themselves and others. They have made significant contributions to communities by revitalizing underprivileged areas, offering affordable housing opportunities, and supporting local enterprises. This further highlights the potential positive influence these actions can have on communities.

5. Self-directed IRAs can be used to create a tax-advantaged legacy for your family, loved ones or charity.

The potential benefits of self-directed IRAs can be extended beyond your own lifetime.

When you pass away, you have the option to choose one or more beneficiaries for your IRA. These beneficiaries can be your spouse, children, grandchildren, charities, or any other individual you wish to inherit your account.

Typically, after inheriting a retirement account, any remaining funds and assets inside the account continue to enjoy tax benefits and can be allocated to the beneficiary. For instance, consider the scenario where an individual inherits a Roth IRA containing $50,000 in cash and $150,000 worth of rental properties generating a monthly rental income of $1,500.

In this instance, the recipient has the option to distribute the entire $50,000 in cash without tax implications, as the Roth IRA has fulfilled all eligibility conditions. Additionally, they have the opportunity to distribute $1,500 in tax-exempt rental income from the Roth IRA every month. Furthermore, they retain the choice to retain the funds in the account and persist in investing if desired.

It is advisable, as usual, to seek guidance from a tax lawyer or financial expert when executing your estate planning and dealing with regulations related to beneficiaries.