A self-directed individual retirement account (SDIRA) is a type of individual retirement account (IRA) that can hold a variety of alternative investments normally prohibited from regular IRAs. Although the account is administered by a custodian or trustee, it's directly managed by the account holder, which is the reason it's called self-directed.
Available as either a traditional IRA (to which you make tax-deductible contributions) or a Roth IRA (from which you take tax-free distributions), self-directed IRAs are best suited for savvy investors who already understand the alternative investments and who want to diversify in a tax-advantaged account.
The main difference between an SDIRA and other IRAs is the types of investments you can hold in the account. In general, regular IRAs are limited to common securities like stocks, bonds, certificates of deposit, and mutual or exchange-traded funds (ETFs).
But SDIRAs allow the owner to invest in a much broader array of assets. With an SDIRA, you can hold precious metals, commodities, private placements, limited partnerships, tax lien certificates, real estate, and other sorts of alternative investments.
Joining us for our discussion on How Flexible Is Your IRA? is Patrick Hagen , who is in Holly Springs NC. Patrick Hagen is the National Director of Business Development for STRATA Trust Company, a self-directed IRA custodian that specializes in holding alternative assets for IRA investors. He has been in the self-directed IRA space for over 16 years. Patrick is an authority in the self-directed IRA space and a resource to his clients and referral partners. He teaches courses and gives live and web-based presentations to investors, CPAs, attorneys, and financial planners. He has extensive experience with alternative IRA investment transactions (real estate, precious metals, private placements, notes, etc.).
Welcome to Mastering Your Money, Patrick Hagen