If you have ever wondered whether or not it was possible to protect your retirement funds by investing non-traditional investments, then you are not alone. Is it really possible to have greater control over your investment strategies? The short answer to this question is “Yes,” there is indeed a little known method to do so.
Almost all the pension plans that are available after retirement require for you to hand over your assets to a custodian, who will essentially have physical possession of your assets and whose nod would be necessary in whatever transactions you would want to make. Whether it is a 401(k) or an Individual Retirement Account (IRA) that you have, all your checks for investment purposes will be deposited and made payable directly to your custodian.
With such an amount of restrictions, one is inclined to wonder whether it is possible to make post-retirement investments without the involvement of a custodian.
The answer is yes; with a self-directed IRA. A self-directed IRA, as its name suggests, is a retirement plan in which the account holder has full control over their assets and are entitled to make their own decisions on where and when to invest. Maybe you would like to invest in live cattle over in Wyoming, or maybe in a gas station in Ohio, or in a cemetery in Miami. It might sound too good to be true or even illegal, but with a self-directed IRA, you can invest in whatever you feel comfortable with and no one can ask you any questions. Just an advice, a good thing to invest in is something you know about and/or can control.
The self-directed IRA retirement plan is widely known for its ability to invest in the real estate market, but you can also invest in private businesses like limited liability corporations (LLCs) and joint ventures. A lot of investors do not know this, but it is perfectly legal, and has been since 1974 when the IRA laws were chalked out, to invest IRA assets in private equities.
It is important to keep in mind, however, that you will not multiply your cash overnight just by registering a self-directed IRA and you might even end up losing money if you are not careful with your decisions. Just remember to gather a little knowledge on the self-directed IRA beforehand and to not do anything silly and you should be doing just fine.