A self-directed IRA is no different than any other IRA, except that you as the owner direct the custodian to make the investments on your behalf. You select the investment. You can work with advisors, planners, anybody you choose to make the selection, but YOU must decide what to invest in.
You can move your retirement plan from any IRA, Roth IRA, SEP IRA or Educational Savings Account into a self-directed IRA. Those accounts are all eligible to move to a custodian that will allow you to self-direct. When you do move to a custodian, it does not mean that you have to liquidate all of your assets or take all of the money out of your existing IRA, you can leave some behind. You can liquidate to the extent that you want to. You don’t have to move all of it.
There are only two assets that you can’t invest in through a self-directed IRA: collectibles and life insurance. The other main aspect of self-directing is that you have to be making the purchase for investment purposes. You can’t, for example, invest in a house that your child will live in, as that would directly benefit him/her. You and your family members are disqualified persons whom you cannot buy investments from or on behalf of.
Don’t keep all your assets in one “basket”. It’s very important to diversify. The stock market is not presently doing well, but real estate is “on sale” and it’s a good time to buy. Real estate should be included in almost every retirement account to diversify and minimize risk. You need to diversify your retirement account as much as you diversify other portfolios.
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