“Flexibility.” It’s a word you likely associate with gymnasts, not with retirement investing accounts. After all, many of us have the experience of using retirement accounts with limited options. And even if we have a Self-Directed IRA, we know that we still have to keep to a fairly strict set of retirement rules to make sure our account remains in good standing. But when you combine one of the most flexible types of retirement accounts with checkbook control, you’d be amazed how much flexibility there can be. Let’s explore how a Self-Directed Roth IRA with checkbook control can make you invest with more freedom:
What is a Self-Directed Roth IRA with Checkbook Control?
First, a definition. A Self-Directed Roth IRA is a type of retirement account allowing investors more control over their investment choices compared to traditional Roth IRAs. With a Self-Directed Roth IRA, you have more options for investing. You can invest in a wide range of assets beyond stocks and bonds, including real estate, precious metals, and private equity. You simply have to direct a Self-Directed IRA custodian to make buy and sell orders on the IRA’s behalf, and you’re good to go.
But what if you want to skip the custodian aspect? Adding Checkbook Control to this setup gives you direct management control. You can access your investment funds through a dedicated LLC (Limited Liability Company) owned by the IRA. This LLC owns a checkbook, and since the LLC is owned by the IRA, you get to control that checkbook. The result? Flexibility. It’s much easier to manage retirement investments, which makes it easier to capitalize on opportunities as they arise. You simply have to write a check from the IRA when it’s time to make the investment you want.
What are the Benefits of Self-Directed Roth IRAs Using Checkbook Control?
Yes, flexibility is a key benefit. You can make quick investments of valid retirement assets once you’ve established an account like this. Real estate, precious metals, private equity—these all can count. And since you don’t have to wait for custodial approval, the investments will go through quickly and you can count the assets as part of your retirement account.
Additionally, it helps to have reduced fees over the long-term. Since you’re not constantly enlisting the help of a custodian, the long-term fees of this arrangement are quite favorable to the investor. This comes with one caveat: upfront fees. It does take a little more to acquire control for yourself, as you’ll have to fill out the paperwork for establishing the LLC. Additionally, each state has different requirements for keeping your LLC in good standing, which can include some ongoing fees.
You’ll also find that using the checkbook control this way can help make transactions easier to keep track of. Keep copies of your transactions in a separate folder so you can always look at what you’ve put in the retirement account.
What About the Roth IRA?
The Roth IRA is flexible because it uses after-tax dollars for investing. This means investors using a Roth IRA can potentially access some of their retirement funds without the fee that come with early withdrawals, under certain provisions. The Roth IRA’s flexibility also means you can continue to invest with the account into retirement age without having to take out RMDs, or Required Minimum Distributions. You can simply let the account continue to grow if that’s what you want.
For more information, we encourage you to reach out to us and find out the next steps. Contact TurnKey IRA by dialing our number at 844-8876-IRA (472).
