There are many questions and misconceptions involving how self-directed IRAs work. David Moore, IRA Advantage self-directed IRA expert, answers some of the most common questions asked about self-directed IRAs. We’ve selected a collection of his best IRA Advantage articles including his top article that explains the concepts behind the most common misunderstandings to help make your investing make sense.
The Self-Directed IRA – We Debunk The Myths
Misconceptions are especially dangerous in investing because you will not even be aware that you have them. Many of the common objections to using IRA and 401K funds for real estate investments are actually just common myths.
Using a self-directed IRA for investing in real estate in particular has a large amount of rules and regulations surrounding it. It’s important to know what is true and what is false in order to make wise investments. For example:
- TRUE: You cannot personally use property owned by your IRA.
- TRUE: You can only use IRA funds for all expenses associated with the property.
- FALSE: If you purchase a building with taxable (non-IRA) funds, you get to write-off depreciation
Read our full article to make sure that you’re informed about these and other myths and misunderstandings of self-directed IRA investing.
Can You Withdraw Money from a Self-Directed IRA?
You invest with IRAs so that you can make money. But when can you access that money? The magic ages are 59 ½ and 70 ½.
- At 59 ½, you can get money out without the penalty.
- At 70 ½, you’re going to have required minimum distributions (or RMDs).
But even though you’ll be required to take money out at 70 ½, there is more than one way to receive distributions. In-kind distributions open up many different options for receiving your IRA funds.
Take a look at our full article to get all the details on when you are allowed to withdraw from your IRA.
Do I Need A Custodian for A Self-Directed IRA?
The definition of a self-directed IRA can vary depending on who you talk to, but many companies offer “self-directed” IRA options that are anything but self-directed.
“A self-directed IRA custodian will allow you to buy into any asset that’s allowed in an IRA…A self-directed IRA is just a term that describes an account that allows you to do what you want to do, but this term is not legally defined and its meaning is not universally agreed upon. Our definition of a self-directed IRA is an account that truly allows you to make any investment the law allows, but not everyone sees it that way.” – David Moore
Making sure that you have the right custodian can ensure that you have a truly self-directed IRA. Read our full article to take a look at self-directed IRA custodians, what they are, and whether you need a custodian for self-directed IRAs.
Can I Buy Real Estate With A Self-Directed IRA?
Real estate is a great investment, but can you use your IRA funds for it?
It is possible to buy real estate with IRAs or 401K plans when you have a truly self-directed account. In many instances, that purchase can be made as simply as by writing a check when you have one of our Checkbook Advantage IRA accounts or our truly self-directed solo 401K plans. – David Moore
Read our full article on self-directed IRAs in real estate investment explaining what you can and can’t do when investing in real estate with your self-directed IRA.
There’s a lot that you can do with a self-directed IRA, and because of that, there’s a great deal of information to know regarding them. If you need help understanding your self-directed IRA investing, call an informed professional – David Moore at 503-619-0223.
