Unlike standard Roth and Traditional IRAs, a self-directed IRAs, structured within an LLC, allows the beneficiary to circumvent transaction delays and penalties for distribution when making non-traditional retirement investments. Rolling over and converting existing 401(k) or IRA funds to a self-directed account allows for investing in the following:
- Residential and commercial real estate
- Selected silver and gold bullion and coins
- Private equity and private placement
- Promissory notes and personal loans
- Mortgage notes and tax liens
While limitation exist for self-directed IRAs, they are few an include such things as collectibles, works of art and life insurance contracts. Tapping the reservoir of existing money in 401(k)s and IRAs is a great way to provide a boost to retirement savings. In the case of a Self-Directed Roth IRA, any investment income that would normally be taxed at capital gains rates is allowed to remain in the account and grow tax-free forever.
As is the case with most alternative and self-directed custodians, the beneficiary will receive checkbook control over the retirement funds, allowing for timely purchases of highly-lucrative and time-sensitive investments.