What are the benefits of having an self-directed retirement LLC over a simple qualified savings plan? The benefits are vast.
A self directed retirement LLC is an alternative investing plan in which the qualified plan holders, or investors choose to personally manage their own account funds within the structure of a uniquely created Limited Liability Company or LLC. This type of privately held corporation is not your standard run-of-the-mill business entity that you can pick up off the shelf at the Barnes and Nobles. If you take this route, you won’t get anywhere with a self directed account custodian. This is due to the rules related to Individual Retirement Arrangement.
Properly structuring a tangible asset qualified program such as a retirement LLC, in which the structured plan owns the corporation, can offer the following benefits.
1. It can trim down custodial processing delays, transactional fees and other paperwork commonly associated with this type of investment. The procedure is not different from other structurally diversified options in which an investor assigns a custodian to maintain his plan assets and file important records relating to the them. In any case, the custodian may not, in any way, be allowed to give financial advice regarding the investment decisions of its investor.
2. One point that sets the self directed arrangement apart from other plans, is that the account holder, may carry out transactions without the direct participation or oversight of the program’s custodian. This reduces custodial fees as well as delays which typically occur with other more conventional qualified accounts.
3. The less restricted account holder has more direct control over the investments in an LLC than with a typical, more regulated program; Including investment decisions. However, this does not mean that you can simply use the account funds for personal interests or for investments that violate IRS prohibited transactions. Fund co-mingling is no joke in the eyes of Uncle Sam so you need to be very vigilant and seek the advice of good counsel, namely a specialist that understands qualified plans thoroughly.
What Is the Difference Between a Self Directed Program and a Self Directed Real Estate Option?
A self managed option is commonly termed as a self directed real estate arrangement, but this type of thinking certainly limits the account holder. Yes, the very fact that this type of individual retirement entity permits the account owner to make investments in real estate properties, residential or commercial. It also allows for the diverse nature of attaining physical, hard assets such as platinum, gold and silver. One may also acquire bonds, stocks, and certain types of investment derivatives like call and put options. Click here to see the retirement real estate acquisition process.
Other savings vehicles, such as the common retirement arrangement as well as the Roth option, differ from a self directed investment vehicle because they only allow a small number of tangible options. However, that doesn’t mean that the self directed account should be everyone’s choice. Making investments is only one aspect of a carefully planned retirement. There are still other factors that should be considered. For this reason, one desiring to open a retirement savings plan of any kind should consult a financial expert in individual retirement arrangements first. This ensures that the best type of individual retirement vehicle is taken from the very beginning.
So many future retirees fly by the seat of their pants on day one, when first structuring their entire savings future. I suppose we may simply chalk that up to experience, but in most cases, experience is too late with regard to individual retirement planning. This is the prime reason that even a young investor can make a life choice by simply reaching out to a professional adviser on day one. A truly educated adviser or financial professional will understand the subtleties and nuances within complex qualified plans that could take a lifetime for a novice to learn; if ever.
Entirely diverse retirement arrangements may be made in this day and age and the widely varying features of self-directed savings structures may be attained with a simple phone call or email. There is no excuse today for not being extremely well informed. Seek advice from well informed professionals that will take the time to explain these retirements savings options with you.
For more answers, visit our frequently asked questions on our common questions page of our website. There you will find more information. Happy investing.