With all of the relatively recent allegations of malfeasance by major corporations and financial institutions, combined with the billions of dollars in pension and retirement funds that evaporated from the stock markets, a self-directed retirement seems more and more attractive. Many novice investors learned harsh lessons about the realities of investing. Those lessons have translated into a sea of change in investor attitudes in recent years.
Individual Retirement Accounts are the only real options for self-employed individuals, unemployed individuals, and small business owners but the IRA's appeal has expanded greatly beyond those groups. Many people are now choosing to roll their 401(k)s over into IRAs. The Roth IRA is the most tax-favorable retirement account in history and a self-directed Roth IRA gives the investor the freedom to invest at will.
A true self-directed IRA is simply one in which the IRA owner maintains checkbook control over the account (circumventing many transaction fees and management fees). Such control makes real estate investing (a harbor for many from the vagaries of the stock markets) a much more palatable option. In a traditionally held IRA at self directed IRA custodian, real estate transactions are severely limited and the various expenses incurred usually trigger additional fees which can eat into profits and thus the returns that are paid back to the IRA.
A Truly Self-Directed Retirement
If your self-directed IRA is subject to too many fees, your self-direction becomes muted by the desire to avoid extra fees. Look for companies that offer checkbook control of self-directed IRAs, and strive to keep fees to an absolute minimum.