Interested in opening a Self-Directed IRA? Then you probably know that this strategy is a great way to diversify a retirement portfolio beyond stocks, bonds, and mutual funds. There’s nothing wrong with those assets, of course—but maybe you want something more in your retirement account. That’s where Self-Directed Checkbook Control comes in—the ability to make retirement investments from the power of a checkbook. This guide will walk you through what checkbook control is, how it works, and the benefits and considerations you need to be aware of before diving in.
What is Self-Directed Checkbook Control?
Checkbook control allows you to directly manage your Self-Directed IRA investments without the need to go through a custodian for every transaction. Essentially, you set up a special-purpose Limited Liability Company (LLC) that your IRA owns. You, as the IRA owner, manage the LLC. And you’ll have a checkbook linked to the LLC’s bank account. This setup gives you the freedom to make investments from a checkbook, with minimal custodial approval required.
How Does Self-Directed IRA Checkbook Control Work?
1. Establish Your Self-Directed IRA
The first step is to establish a Self-Directed IRA with a qualified custodian. Not all custodians offer SDIRAs, so you’ll need to find one that does. This custodian will hold your IRA funds and help set up the initial account.
2. Create an LLC
Next, you’ll create an LLC that your IRA owns. This LLC should be set up specifically for your IRA. A key point here? It’s crucial that the structure complies with IRS rules to avoid penalties. The IRA funds are then used to purchase 100% of the LLC’s membership.
3. Open a Bank Account
Open a bank account in the name of your new LLC. This account will be funded with your IRA money and will be used for all investment transactions. As the manager of the LLC, you’ll have control over the checkbook. This means you can write checks and make investment decisions—all without needing custodian approval for each transaction.
The Benefits of Self-Directed Checkbook Control
The first benefit is speed and efficiency. With checkbook control, you can act quickly on investment opportunities. There’s no need to wait for custodian approval, which can sometimes take days or weeks.
You can also reduce the fees you pay for this retirement arrangement over the long-haul. After all, custodian fees can add up, especially if you’re making multiple transactions. With checkbook control, you’ll likely encounter fewer transaction-related fees, potentially saving you money.
Perhaps the most important benefit, however, is control. With a Checkbook Control IRA, you’ll have direct control over your investments. This flexibility allows you to take advantage of a broader range of investment opportunities, including real estate, private placements, precious metals, and more.
Finally, managing your investments through an LLC can simplify the process, making it easier to track expenses and returns.
A Self-Directed IRA with checkbook control can be a powerful tool for anyone who wants more out of their retirement portfolio. As we’ve noted, the benefits are numerous. However, Checkbook Control isn’t without its complexities and risks. By understanding the process and staying compliant with IRS regulations, you should have no problems minimizing these risks and maximizing the value of your investments. Whether you’re investing in real estate, startups, or other alternative assets, Self-Directed Checkbook Control offers the flexibility and speed to capitalize on a wide range of opportunities.
Contact TurnKey IRA at 844-8876-IRA (472) for a free consultation. Download our free guide or visit us online at www.turnkeyira.com.
