We talk a lot about Checkbook IRAs here at TurnKey IRA, and for good reason. A Checkbook IRA, also known as a Self-Directed IRA LLC, is a type of retirement account that allows investors to hold and manage a wide variety of investments. You can use retirement funds for real estate, private equity, precious metals, and more. And the “checkbook” aspect brings even more flexibility. In this setup, the IRA is the owner of the LLC, and the account holder acts as the manager of the LLC. The LLC’s checkbook gives you a lot of power, flexibility, and control in managing your retirement investments.
But it takes a little bit to set up an LLC within a retirement account. Why consider this arrangement in the first place? Let’s get a tad more specific about Checkbook IRAs:
Checkbook IRAs: More Control Over Investments
Let’s start with the most obvious benefit. One of the key advantages of a Checkbook IRA is that it puts you in the cockpit of your own IRA. For example, the usual Self-Directed IRAs often require custodian approval for each transaction, which can be time-consuming and limit your investment options. With a Checkbook IRA, you can write a check and voila—you’ve made a retirement investment.
The Diversification of Investment Options
You may know that Self-Directed IRAs give you access to more than stocks and bonds. While traditional IRAs typically limit investments to stocks and bonds, a Self-Directed IRA means you can work with a Self-Directed IRA administration firm to invest in the full range of assets available to you. That means more flexibility over the kinds of assets you keep.
A Streamlined Investment Process
Many Self-Directed IRAs often come with administrative hurdles and fees for each investment transaction. Not so with Checkbook IRAs. You can write checks directly from the LLC’s bank account to fund investments, pay expenses, and handle other financial transactions.
Tax Advantages
They are retirement accounts, after all—you’ll have tax advantages here. For a Self-Directed Roth IRA LLC, for example, you benefit from tax-free growth and withdrawals in retirement. With a Self-Directed Traditional IRA LLC, your investments grow tax-deferred until you take distributions.
Reduced Custodian Fees
Traditional Self-Directed IRAs often involve custodian fees for each transaction, which can add up over time—especially if you’re working with a Self-Directed IRA administration firm with a strange fee structure. A Checkbook IRA LLC can significantly reduce these fees by allowing you to manage investments directly. Instead of paying fees for each transaction, you might only incur costs associated with maintaining the LLC and its operations.
Increased Flexibility and Speed
See an investment opportunity? You can write a check. This speed is a major benefit of a Checkbook IRA. Whether you’re interested in purchasing a property, investing in a private business, or exploring other alternative assets, the flexibility of a Checkbook IRA can be a major advantage.
Enhanced Asset Protection
LLCs are helpful, after all. When using a Checkbook IRA LLC, your personal assets have that LLC protection, giving you an additional layer of security. This limited liability structure ensures that only the assets within the LLC are at risk, giving some defensive heft to your retirement finances.
Ready to learn more about Checkbook IRAs after learning the basics? Excited about all the benefits you just read about? There’s no time to get started like the present. Reach out to TurnKey IRA and find out about Checkbook LLCs by giving us a ring at our toll-free phone number, which is ready for your call at 844-8876-IRA (472).
