The structure of the Self-Directed IRA can provide tremendous flexibility for an IRA owner. The actual rules, regulations, and laws that are utilized to establish, maintain, and manage a Self-Directed IRA are indeed fairly complex. Because of these rules, some people not very familiar with the Self-Directed IRA concept might assume that the process of setting up the Self-Directed IRA account could be very difficult, confusing, and time consuming.
The good news is that managing a Self-Directed IRA can be a very simple process.
A good Self-Directed IRA Custodian can help streamline the process and reduce the involvement, time, and stress for an IRA owner. While there are many administration steps "behind the scene" that are handled by the Self-Directed IRA Custodian, typically an IRA owner will be required to participate in these steps:
- Complete paperwork to establish a Self-Directed IRA account.
- Send the paperwork to the Self-Directed IRA Custodian.
- Fund the Self-Directed IRA account by: Completing paperwork to transfer a current IRA account to the Self-Directed IRA account; Complete paperwork to transfer a current employer sponsored retirement plan to the Self-Directed IRA account; Complete paperwork and send a current year IRA contribution to the Self-Directed IRA account.
- Wait for confirmation that funds have been received by the Self-Directed IRA account.
- Direct the Self-Directed IRA Custodian to invest the funds into the preferred investment option. The Self-Directed IRA Custodian will typically provide guidance as to their opinion of the suitability and acceptability of the investment choice according to their interpretation of Internal Revenue Service rules.
- Additional deposits can be made into the same Self-Directed IRA account by following the steps in #3 above.
- Withdrawals can be made by sending a written request to the Self-Directed IRA Custodian.
- Assets in the Self-Directed IRA can be sold by sending a written request to the Self-Directed IRA Custodian.
- Sales proceeds from #8 can be reinvested in new assets by repeating step #5 above.
By following these simple steps an IRA owner can have increased investment flexibility. |
