Many people have heard about self directed IRAs and their power to expand the asset choice of a retirement account. However, if you’re like most of those people, you still don’t have a clear idea on how to set up a Self Directed IRA. It would be great to be able to diversify your retirement account, but how exactly do you do that? In this article, we’ll explain in simple terms the steps you’ll need to take to set up your own Self Directed IRA.

  1. Self Directed IRA Research

    Research and knowledge building should always be your first step in any financial endeavor. This is especially true when your retirement funds are at stake. When you start researching providers for Self Directed IRAs, keep the following two factors in mind:

    • Account Type: Self Directed IRAs come in two basic versions – the Custodian model and the Checkbook model. Each one has its own unique advantages depending upon your investing strategy. (As the Checkbook model is the more economic and versatile model, we’ll focus on that one here.)
    • Provider: When researching companies, look for experience, professionalism, and preferably some kind of reliability rating like the BBB. Also take special notice of the services provided. A quality provider should be able to give you turnkey service for your Self Directed IRA. That means that you should be doing little more than filling out a few forms and opening a checking account at the bank of your choice. You have to feel comfortable that any problems that arise will be taken care of quickly and efficiently by your chosen provider. The steps that follow should all be facilitated by your provider and are listed here to fill out the details of the setup process.
  2. Self Directed IRA Custodian

    No matter which model you choose to go with, your IRA will still need to be held by a custodian. Although most custodians do not service Self Directed IRAs, there is a select group who do offer that capability. Your provider should be able to tell you who is reliable in this area, and assist you with setting up the account.

  3. IRA Rollover

    In order to access your funds in a self directed capacity, you will have to roll them over from your previous retirement account. (You can find out more about the process of rollover here.) If you don’t have a previous retirement account, you can get started by just making an initial contribution.

  4. IRA LLC Setup

    Your provider will establish an LLC (in the appropriate state) which will serve as the investing platform. You, as the account holder, will be named as the non-compensated manager of the LLC, thereby allowing you to fully control the investing process.

  5. Checking Account

    You will open a checking account at any bank in the name of the new LLC. Now you’re ready to start investing your IRA funds. Find your favored investment, write a check, and that asset automatically becomes part of your IRA.

Broad Financial is an industry leader in the facilitation of Self Directed IRAs with Checkbook Control. Our friendly Specialists are always ready to answer any questions you may have regarding the process. You can speak to a Specialist today by calling 800.395.5200.