Self-Directed and Real Estate IRAs - Top 10 Reasons to Start One Now

Both IRAs have been permitted by the IRS for years, yet is seems that very few people know that they even exist. Quite simply, a self-directed IRA is one that allows an investor to hold non-traditional assets (like real estate, limited partnerships, general partnerships, private stock and more). This opens up a world of investment possibilities beyond the common stocks, bonds and mutual funds within most retirement plans.

Real estate IRAs are a specific type of self-directed IRA that may only hold real estate. Some IRA custodians prefer to handle only real estate transactions and holdings and are an excellent option for those investors seeking to maintain some traditional holdings in their current retirement accounts and diversify in a separate account with real estate.

Here are 10 reasons, regardless of the economic climate, that you should consider establishing a self-directed or real estate IRA today:

1. Most IRA custodians and employer-sponsored retirement plans limit your choices for investments. With a self-directed IRA, you can choose from a much wider array of investment possibilities from real estate to private stock and private notes.
2. Diversification is an important part of any balanced portfolio. Establishing a self-directed or real estate IRA allows you to diversify your portfolio in more ways than you ever thought possible.
3. For established or aspiring real estate investors, self-directed IRAs offer the opportunity to invest in an asset class they know and trust.
4. For those using a self-directed IRA to purchase real estate, you can use leverage in your IRA through non-recourse loans to acquire property (not possible in with IRAs that are not truly self-directed).
5. Self-directed IRAs can be established even when you already have an existing employer or IRA plan.
6. You can rollover a portion or all of assets from your current IRA plan into a self-directed IRA.
7. The ability to control your retirement in a way like never before through a self-directed IRA is very empowering to an investor. Finally, you have a choice of what you can invest in - seize the opportunity!
8. Contribution limits on an annual basis are the same for a self-directed or real estate IRA as they are for any other IRA.
9. You can establish a self-directed solo 401(k) plan, Roth IRA, Traditional IRA, Coverdell Savings account (Education IRA), corporate 401(k) or SEP IRA.
10. For those looking to learn more, visit InvestorLoft's Self-Directed IRA Learning Center