Are you seeking greater control and flexibility in your retirement investing than a standard IRA can offer? You're not alone. With so many assets and exciting opportunities out there, it's understandable why people might not want to be confined to Wall Street products. A Self-Directed Roth IRA with Checkbook Control (also sometimes referred to as a Checkbook IRA) allows you to invest in real estate, private placements, cryptocurrency, and many other alternative assets. Not only that, you can be more hands-on with your investing when you gain checkbook control of your Self-Directed IRA (SDIRA). Here's what you need to know to determine whether a Self-Directed Roth IRA with Checkbook Control is right for you.
Yes, you can! There are no extra eligibility requirements for SDIRAs that aren’t part of the basic information required to open a standard IRA. You can open a Self-Directed Roth IRA with Checkbook Control whenever you're ready to fund it. You'll just need to find a reputable IRA LLC facilitator like Broad Financial who specializes in these types of retirement accounts designed to hold alternative assets.
A Self-Directed Roth IRA with Checkbook Control provides the tax advantages of a Roth IRA, the flexibility of an SDIRA, and additional real-time investing freedom through the checkbook control feature. Unlike standard IRAs, which are typically limited to stocks, bonds, and mutual funds, a Self-Directed Roth IRA allows you to diversify into alternative assets. With checkbook control of your SDIRA, you gain the ability to complete everyday investment transactions directly through a dedicated checking account and entity, rather than going through your SDIRA custodian as you would in a classic SDIRA.
A Self-Directed IRA with Checkbook Control can be opened as either a Traditional IRA or a Roth IRA—the difference lies in the tax treatment. With a Self-Directed Traditional IRA, contributions are made on a pre-tax basis and can grow tax-deferred. In a Self-Directed Roth IRA, contributions are made with after-tax dollars, so qualified distributions are in turn tax-free. In either type of SDIRA, you have the key benefit of being able to invest in alternative assets.
A Self-Directed Roth IRA with Checkbook Control opens the door to so many possibilities. A few of the most well-known SDIRA investments include real estate, private placements, and cryptocurrency. With that said, there are dozens if not hundreds of alternative assets you can consider if you’re looking to get creative and align your investments with your passions and interests.
Yes, it's common to transfer or roll over funds from an existing IRA or 401(k) into a Self-Directed Roth IRA with Checkbook Control. If you currently have a standard Roth IRA, this involves converting pre-tax retirement savings into after-tax funds, which may result in a tax liability for the year in which the Roth conversion is executed. Rolling over funds from a Traditional IRA or 401(k) is relatively straightforward. With an existing 401(k), it’s important to contact your current plan administrator to see if your plan allows you to roll over funds. It’s also recommended to consult with a trusted tax professional to plan and navigate the transition.
All Roth IRAs have the same contribution limits regardless of whether they are standard or self-directed. These limits vary based on annual regulations set by the IRS. In 2024, individuals under age 50 can contribute a maximum of $6,500, while those 50 and older can contribute up to $7,500. The exact amount you can contribute depends on your modified adjusted gross income (MAGI). A tax professional can help you understand the nuances and how they apply to your situation.
Opening a Self-Directed IRA with Checkbook Control may seem confusing when you’re searching online, but at Broad Financial, it’s actually quite easy and you’re guided by experts along the way.
First, you’ll open a new Self-Directed IRA with our sister company, Madison Trust. To fund your Self-Directed IRA, you’ll transfer or rollover all - or a portion of - your funds from an existing retirement account, such as an IRA or 401(k), or make an initial contribution.
Next, you’ll complete Broad Financial’s easy online application to begin the checkbook control upgrade process. Broad Financial will then create a specialized IRA LLC or IRA Trust (whichever one you choose) for your IRA and take care of the paperwork.
Once your specialized LLC or trust is created, you will open a checking account in the name of your entity at the bank of your choice and instruct Madison Trust to send your IRA funds directly to the dedicated checking account.
Then, you can start investing with the power of checkbook control by simply writing a check or sending a wire from your new LLC or trust checking account.
Interested in opening a Self-Directed Roth IRA with Checkbook Control or want to learn more? Schedule a discovery call with Broad Financial today!
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