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Self-Directed IRA Fees – Full Comparison

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Self-Directed IRA Fees – Full Comparison 2018-07-19T15:17:54+00:00

Self-Directed IRA Fee Structures

When researching Self-Directed IRAs, you’ll find that there are three basic fee structures:

  1. Transaction Fees. In this model there is a low set-up fee, and the account holder pays a transaction fee for every action subsequently taken by the IRA.
  2. Dollar value of assets that the IRA possesses. The more assets that are held, the higher the annual fee.
  3. Checkbook Self-Directed IRA. There is a higher initial set-up fee, but there are virtually no fees afterwards.

Obviously everybody would like to choose the fee structure which affords them the greatest possible savings. However, even with that thought in mind, it’s not always so obvious which of the three fee structures will accomplish that. A number of factors can determine how much is eventually charged, and they include value of the invested assets, frequency of transactions, and degree of investor involvement. It’s best to run the numbers for your specific investment and see what makes the most sense.

Practical Application

To get a better grasp of the situation, let’s take a look at a standard self-directed IRA investment, and then figure out what it would cost in fees for each of the three models.

Donna switched jobs and took the opportunity to rollover her 401(k) into a self-directed IRA. She used her retirement funds to purchase a two family house at the cost of $450,000. She then rented it out. Property management includes paying standard bills (electric, water, etc.), grounds maintenance (mowing and snow removal), and taking care of the occasional plumber call. Additionally (as with most properties) the house needed some initial rehab before being put on the rental market.

In this scenario, the fees would break down as follows. (These dollar values are taken from the industry’s leading provider for each platform.)

3 Year Total
10 Year Total
  • Fees Due Over Time

  • Set Up Fee
  • Custodial Set Up Fee
  • Asset Purchase
  • Expense Payments
  • Custodial Account Fee
  • All Inclusive (according to property value)
  • 1st Year Total Fees
  • 2nd Year Total Fees
  • 3rd Year Total Fees
  • Broad Financial
  • Checkbook Model

  • $694.33
    $345.50
    Per Year On Average

  • $1,395
    Set Up Fee
  • $100
    Custodial Set Up Fee
  • Asset Purchase
  • Expense Payments
  • $196
    Custodial Account Fee
  • All Inclusive (according to property value)
  • $1,691
    1st Year Total Fees
  • $196
    2nd Year Total Fees
  • $196
    3rd Year Total Fees
  • Transaction Model

  • $1,189.33
    $1,166
    Per Year On Average

  • $50
    Set Up Fee
  • Custodial Set Up Fee
  • $50
    Asset Purchase
  • $960
    Expense Payments
  • $196
    Custodial Account Fee
  • All Inclusive (according to property value)
  • $1,256
    1st Year Total Fees
  • $1,156
    2nd Year Total Fees
  • $1,156
    3rd Year Total Fees
  • Asset Model

  • $1,200
    $1,480
    Per Year On Average

  • $50
    Set Up Fee
  • Custodial Set Up Fee
  • Asset Purchase
  • Expense Payments
  • Custodial Account Fee
  • $975
    All Inclusive (according to property value)
  • $1,025
    1st Year Total Fees
  • $975
    2nd Year Total Fees
  • $1,600
    3rd Year Total Fees

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