Self-Directed IRA - SDIRA

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.

BREAKING DOWN '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.

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RELATED FAQS
  1. What are the disadvantages of commodities on a Roth IRA?

    Commodity investments refer to securities based around goods such as grain, beef, oil, gold and silver. There are many ways ... Read Full Answer >>
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  3. Can I use my self-directed IRA to take out a loan?

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  4. What are the main advantages of a self-directed IRA?

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