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Home > Blog > How Do I Set Up a Self Directed IRA?

How Do I Set Up a Self Directed IRA?

During one’s investment journey, an investor might decide that they want to go the alternative route and diversify beyond Wall Street. But, even with that decision made, an investor might still be hesitant to move forward. Most of that hesitancy comes from an unfamiliarity with the industry. So, you may be wondering, "How do I open a Self-Directed IRA?"

If you’re looking into how to open a Self-Directed IRA, you’ve come to the right place!

How to Open a Self-Directed IRA as the Investor

From your perspective as an investor, the process is incredibly simple. There are essentially three basic steps:

  1. Do your research.
  2. Fill out a few forms for your custodian.
  3. Open a checking account.

Step 1: Do Your Research 

Research and knowledge-building about how to open a Self-Directed IRA or any other financial endeavor should always be your first step. This is especially true when you’re planning your future in retirement. When you start researching providers for Self-Directed IRAs, keep the following two choices in mind:

  • Account Type: Self-Directed IRAs come in two basic versions: the classic model and the checkbook model. Each one has its own unique advantages depending upon your investing strategy. (As the checkbook model is commonly the more economical 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 those from the BBB. Also, take special notice of the services provided. A high-quality provider should be able to give you turnkey service for your Self-Directed IRA. When opening a Self-Directed IRA, it’s important to choose a provider that you can trust.

Step 2: Fill Out a Few Simple Forms

The self-directed retirement provider you choose to work with will require that you fill out a few forms and return them to the appropriate recipients. This will allow your custodian to set up the necessary accounts.

Step 3: Open a Checking Account

Once you get a capitalization check from your custodian, you take it to the bank of your choosing and open a checking account. You can then start investing immediately by simply writing a check.

Setting Up a Self-Directed IRA: Our Role as the IRA Provider

Of course, there’s much more going on behind the scenes. With an experienced Self-Directed IRA provider like Broad Financial setting up your account, you don’t have to worry about the detailed paperwork and legalities, but many investors are curious. Here’s what the process looks like for us:

Step 1: Self Directed IRA Setup

With your paperwork in hand, we set up a new Self-Directed IRA. We assist in the funding of your account, as you’ll transfer or roll over funds from an existing retirement account, such as an IRA or 401(k), or make an initial contribution.

Step 2: LLC Setup

We then facilitate a limited liability corporation (LLC) for the Self-Directed IRA. This LLC will act as the entity that upgrades your Self-Directed IRA to checkbook control. This is where professionalism and experience are crucial: We can make sure the LLC is organized in accordance with laws and regulations that govern Self-Directed IRA investment platforms.

Step 3: Capitalization

The Self-Directed IRA is then invested in the new LLC. Capitalization is similar to the process of purchasing stock: The Self-Directed IRA essentially buys all of the shares of the new LLC and becomes its sole owner. The check from that sale is then sent to you, the investor, to use in opening a checking account at the bank of your choice.

Get Help Setting Up a Self-Directed IRA Today

The process required to open a Self-Directed IRA account is actually very simple, especially for the investor working with a highly rated, experienced self-directed retirement platform provider. When you set up a Self-Directed IRA with Broad Financial, our Self-Directed IRA Specialists make the process as smooth and worry-free as possible. Broad Financial has earned an A+ rating from the Better Business Bureau for our industry-leading customer support. Once you make that first phone call, a dedicated specialist will guide you every step of the way. The process will be easy and effortless and put you in the mindset you need to start maximizing your retirement investing.

Schedule a call today to chat with one of our Self-Directed IRA Specialists about any questions you may have about setting up a Self-Directed IRA.

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