Is a CheckBook IRA right for me?

By Peter F. Rizzo

CheckBook IRA right for me

People are asking themselves this question every day. With many brokerages and investment advisers touting their expertise and road to a comfortable retirement people are questioning more and more what is the best vehicle to assure a nest egg for the future. Many people have great success using CheckBook IRAs to diversify their investments. You have the flexibility to invest in the traditional investments through your favorite brokerage, but you also have the flexibility to invest in a myriad of other investments. The beauty of the Checkbook IRA is that you are now in complete control of your diversification of assets and have immediate access to funds when that “once in a lifetime opportunity comes along”. Savvy investors diversify their assets and the CheckBook IRA allows you to do that through an LLC owned by your IRA.

Benefits of an IRA-owned LLC

  • LLC owners may enjoy the status and protection in much the same way a corporation does
  • The IRA owner obtains what is known as “checkbook control” over the funds in the account, enabling immediate and easy access to capital to facilitate timely real estate acquisitions and other investments.
  • The ability to write checks directly from the account avoids transaction and other fees generally incurred in a self-directed IRA.

How it works

  • Your self-directed IRA forms an LLC (listing the IRA as the member in the LLC).
  • The account owner becomes the manager of the LLC.
  • The IRA deposits funds into a bank account established in the name of the LLC.
  • The manager identifies investments and writes checks drawn out of the LLC’s account to make purchases.

As easy as this process sounds, it is imperative you set it up through an organization that can guide you through the process and be there when questions arise in the future.  If the flexibility and diversification interest you this might be the vehicle that gives you financial freedom in the future.

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