One of the best-kept secrets of investors is the ability to earn tax-free, passive income utilizing self-directed IRAs. With a self-directed IRA you have the freedom to invest your funds in virtually anything, including real estate and trust deeds. Best of all, your passive earnings go right back into your IRA and remain tax-deferred or tax-free.

Whether you’re investing in individual trust deed investments, fractionalized trust deeds, or fund investments, your self-directed retirement account can be used as the funding source.

What is a Self-directed IRA?

retirement-profileSimply put, a self-directed IRA is a type of IRA account that permits you to direct where your IRA invests. This differs from traditional retirement accounts that only give you a few options of where to invest your money.

Whether you can self-direct your IRA depends upon the IRA custodian. To get started with an existing IRA, or old 401(k) that you roll over into an IRA, you will need to transfer your account to a self-directed custodian. There’s no penalty for doing this because you’re not taking a distribution, you’re simply changing the custodian to one that allows you to self-direct your investments.

Types of accounts that can be Self-Directed

While it may depend on the custodian you select, typically the following accounts will qualify.

Roth IRA’s
Traditional IRA’s
Simple IRA’s401k Solo & Qualified plans
Educational Savings Accounts
Health Savings Accounts

How do I Start a Self-directed IRA?

There are numerous self-directed custodian companies nationally. Due to the growth in this segment, most are familiar with trust deed investment strategies and can walk you through the process of investing with IRA funds. Most companies offer free information packets and make the process quick and painless.

ICCG is not affiliated with any particular IRA custodian, but we can point you in the right direction.