A Roth IRA. The power of the checkbook. The ability to make retirement investments when you want, where you want—within the rules of course. There are a lot of reasons to consider a Checkbook Roth IRA, but it ultimately comes down to this: do you want more retirement freedom? If so, a Checkbook Roth IRA can be a great way to do it.

This arrangement is simple. A “Checkbook Roth IRA” in this context refers to a retirement account—a Self-Directed Roth IRA—which you use to hold a Single Member LLC. Since that LLC holds the power of a business checkbook, your IRA becomes the ultimate power behind that checkbook. You can then use those funds to make quick, flexible, and easy retirement investments as you please. It’s one of the most efficient ways to invest your money while using the tax protections of a Roth IRA. But what if you want to make the most of this arrangement? It will help to have a few tips. Here are some of our favorites:

• Familiarize yourself with the rules and regulations. Before diving into Checkbook Roth IRAs, remember that these are still retirement investments you’re making. You can’t run afoul of certain rules. For example you can’t use these IRA funds to invest in a property in which your brother or sister might be living in. This would create an immediate personal benefit for you, which disqualifies the tax-protected status of a retirement asset.
• Choose a great custodian. The custodian, in this case, is the administration firm who helps you set up the LLC and Roth IRA structure. Yes, once you have this structure properly set up, it’s surprisingly low-maintenance. But you’ll still want to work with a Self-Directed IRA administration firm that can help you with any questions and make the process of establishing your Checkbook Roth IRA as simple as possible.
• Always keep accurate records. We recommend you be as meticulous with your record-keeping as possible. Your detailed records—think receipts, transactions, and written documentation—will help substantiate the retirement status of your IRA’s investments. The IRS needs to know that your retirement investments are just that—separate investments intended for long-term value, not investments that can benefit you in the immediate future. Be prepared to prove that via accurate records.
• Consult professionals for your retirement plans. One thing that’s tricky about Checkbook Roth IRAs? It’s also the thing people love about checkbook control: you have more freedom. And freedom is great if you’re a seasoned investor with loads of investing experience. But what if you’re just starting out? We recommend consulting with a professional like a financial adviser. They can help you plan your decisions, develop a strategy, and squeeze every ounce of juice from your retirement assets.
• Know your goals. Sit down and write your explicit goals and expectations for your Checkbook Roth IRA. What do you want it to achieve? What is the ideal account size after 5 years? 10 years? 20 years? Don’t be afraid to think big and long-term. After all, that’s the idea behind investing in a retirement account. You’re not putting aside money for the here and now. You’re putting aside money that can grow for years, if not decades. If you set clear, definable goals, you’ll stand a better chance of steering your account where you want it to go.

Want to know more about how it works? Want to work with a reliable custodian who can help you get started? Reach out to TurnKey IRA today by dialing our number at 844-8876-IRA (472). Alternatively, schedule a call with us and tell us what you have in mind!