![]() Tip: Because SDIRAs are self-directed, custodians cannot give financial advice. Once you set up the account, you can contribute to it and direct the custodian to make investments for you. The custodian can be a bank, trust company or other entity approved by the IRS. You open an SDIRA with a qualified custodian, which administers the account on your behalf. How does an SDIRA work? It’s pretty straightforward. SDIRAs offer you the freedom to invest in a wider array of assets, including: ![]() Regular IRAs typically limit your investment choices to: An SDIRA gives you more flexibility and control over your investments than other IRA types. Gross says the main difference between an SDIRA and a regular IRA is the investments you can hold. What is a self-directed IRA (SDIRA)? And how does it work?Ī self-directed IRA is a type of traditional or Roth IRA, meaning it allows you to save for retirement on a tax-advantaged basis and has a contribution limit in 2023 of $6,500, or $7,500 for people age 50 and older, says Lori Gross, financial and investment advisor at Outlook Financial Center. We’ll navigate the contours and corners of self-directed IRAs and uncover the potential they hold for savvy investors seeking to take the wheel of their retirement planning. But we will pull back the curtain and explore this often-overlooked account that could give you more control over your retirement funds. In this vast financial landscape, SDIRAs often remain a mystery, tucked away behind more familiar IRAs and 401(k)s. Welcome to the self-directed individual retirement account, or SDIRA, a tool that gives you the keys to drive your investment portfolio anywhere you wish. Now imagine being able to veer off the beaten path of stocks, bonds and mutual funds to explore real estate, precious metals and private businesses. Picture yourself in the driver’s seat of your retirement plan with the freedom to steer your investments in the direction you want them to go.
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