Self-Directed IRA - SDIRA

AAA

DEFINITION of 'Self-Directed IRA - SDIRA'

A retirement account in which the individual investor is in charge of making all investment decisions. The self-directed IRA provides the investor with greater opportunity for asset diversification outside of the traditional stocks bonds and mutual funds, as real estate, private tax liens and notes can be purchased. All securities and investments are held in an account administered by a custodian or trustee.

INVESTOPEDIA EXPLAINS 'Self-Directed IRA - SDIRA'

Some investment types, such as life insurance, are still not permitted in an IRA. In addition, investments cannot be employed for personal use or gain. For example, an investor cannot hold real estate that is personally used in a self-directed IRA. It is the responsibility of the investor to comply with all IRS regulations.

RELATED TERMS
  1. Employee Retirement Income Security ...

    The Employee Retirement Income Security Act of 1974 (ERISA) protects ...
  2. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  3. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  4. Tax Lien

    A legal claim by a government entity against a noncompliant taxpayer's ...
  5. Private Equity

    Equity capital that is not quoted on a public exchange. Private ...
  6. Historic Pricing

    A method for calculating the value of an asset using the last ...
Related Articles
  1. What are the disadvantages of commodities ...
    Mutual Funds & ETFs

    What are the disadvantages of commodities ...

  2. What are the differences between a self-directed ...
    Retirement

    What are the differences between a self-directed ...

  3. Can I use my self-directed IRA to take ...
    Retirement

    Can I use my self-directed IRA to take ...

  4. How do I invest my IRA in real estate?
    Trading Strategies

    How do I invest my IRA in real estate?

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center