IRA Tax Advantage
Individual Retirement Accounts have a tax advantage as an incentive for saving money for retirement. As long as you stay in line with the purpose of an IRA, you can benefit from this advantage. Investments outside of an IRA pay tax on gains, leaving less money to reinvest, which ultimately gives you a lower return in the long run. Investing outside of an IRA has it’s own pros and cons, but for long term investing there is no other vehicle that compares to the benefits of an individual retirement account (IRA).
Invest in what YOU want
IRAs were not meant to solely be invested in publicly traded securities. In fact, IRA code (section 408) makes no mention of stocks, bonds, mutual funds or CDs. The code only mentions a few investments and transactions that are not allowed, giving you the freedom to invest in the ever-changing world you live in.
Invest WHEN you want
A self-directed IRA shouldn’t have holding restrictions or investment restrictions. If you can’t move freely from one investment to another, then you aren’t truly self-directed. A truly self-directed IRA isn’t held up with paperwork, bureaucracy and red tape. Investments can be made from mutual funds to real estate in Costa Rica, from tax liens to private mortgages, or you can sit idle in cash while you look for the perfect investment.
IRA creditor protection at one time was dependent on state laws, but in 2005 the U.S. Supreme Court ruled that much like 401(k)s and social security benefits, IRAs are federally protected from creditor judgements. Long term investments should stay protected from personal liability and a self-directed IRA is a perfect vehicle for any savvy investor who seeks asset protection. Unlike personal investments that can be attached to you and your liabilities, IRAs are kept safe from creditors and must be respected as separate entities.
Real Estate IRA
A self-directed IRA can be used for various investments but if you want real estate in your IRA portfolio the self-directed IRA LLC structure is an invaluable tool. Self-directed IRA custodians may or may not offer private real estate as an option for your IRA investments. IRA custodians who do allow real estate in an IRA usually have their own in-house rules and restrictions to ensure that your investments are administratively feasible for their company. A self-directed IRA LLC will circumvent unwanted bureaucracy when holding real estate in your IRA