When it comes to planning your financial future, a financial counselor may recommend that you prepare for your retirement by creating an IRA. What this advisor won’t explain to you is that although a traditional IRA does offer lots of benefits, you will get significant benefits by selecting an IRA LLC.
Through an IRA LLC, you can enjoy limited culpability and asset protection, control over the IRA checkbook, the ability to put money into whatever you want and the ability to make time-sensitive investments fairly quickly to beat out the competition. Moreover, you can enjoy a tax advantage over other people competing for margin together with tax-free or tax-deferred benefits.
Naturally, you will want to use this flexibility to go for your own investments by finding sound investment vehicles. One such investment choice is real estate. The fact is, a self directed IRA LLC works really well if you desire to put money into real estate properties. This is because you can easily select from a number of real estate opportunities like foreign properties, investment real estate purchase, commercial real estate purchase, raw land, mortgages, deeds of trust, partnerships, private developments, REITS, real estate foreclosures and tax liens.
Considering the scope of options to be found in real estate, it’s easy to set up a diverse portfolio, an approach that is largely considered to reduce your investment risks in the event of economic fluctuations.
However, what happens if you are not interested in real estate investments or a real estate IRA? Does this detract from the many pros of owning a self directed IRA LLC? No, most certainly not. You’re still left with quite a few other investment prospects. For instance, you can build up funds for your retirement by making investments in discounted notes, mutual funds, securities, precious metals, forex, futures trading and private placements. Your truly self directed IRA may also take complete advantage of investments such as tax liens and deeds, stocks, and secured and unsecured loans.
Your checkbook IRA account will provide you with exactly the same overall flexibility and resources associated with a business account, but this account is going to be actually owned by the IRA LLC and not by you.
It is important to take note of, that having a truly self directed IRA does not necessarily mean you won’t ever have a need for a self directed IRA custodian. You are still mandated to have one in accordance with section 408 of the tax code. Nonetheless, the difference between a custodian who takes care of a conventional IRA and one who handles a truly self directed IRA is considerable because you won’t need to seek authorization for every single financial transaction to determine if it is in accord with the plan document. The responsibility of your custodian is basically to hold your IRA LLC and additionally file an annual IRS report on your account.