Disadvantages of a Self-Directed IRA Without Checkbook Control
by Peter Rizzo
Don’t Put Yourself at a Disadvantage
Lately, there seems to be a confusion between Self- Directed IRA Companies and those who offer Checkbook Control. This holds true for Self-Directed 401(k)’s too, but today we will deal with Checkbook IRAs.
There are many Self-Directed IRA companies out there that don’t additionally offer a Checkbook plan as an option. This can lead you to be saddled with a plan that is not the best fit for you based on the type of alternative investments in which you are involved.
Though a Self-Directed IRA by itself provides you with more freedom than a traditional one, you can’t truly achieve total autonomy unless you sign up for the Self-Directed IRA with Checkbook Control. The disadvantages of a Self-Directed IRA without Checkbook Control (otherwise known as an IRA LLC) can make a big difference to your pockets and peace of mind.
First, a Self-Directed IRA with Checkbook Control comes with no transaction fees and no asset-based fees. After your one-time set-up fee, your only continuing payment will be a flat-rate to the custodian of the IRA. Flat rates are not standard across all Self-Directed IRA companies, so it is imperative to conduct due diligence on the fee schedules of the custodians you are considering. There also could be state registration fees yearly, depending on the state your LLC is set up in.
Additionally, having a Self-Directed IRA with Checkbook Control means avoiding the hassle of having to go through your custodian to execute every transaction. Checkbook Control ensures that you can do exactly what you need to do for your investment, exactly when you want to do it. The possibility of a frustrating delay in processing your request, or even worse, an error being made is erased with a Self-Directed IRA with Checkbook Control.
You’re likely choosing to invest in a Self-Directed IRA to take advantage of the ability it provides you to control your retirement money. The disadvantages of not having Checkbook Control put a cap on how empowered you truly are. With Checkbook Control, you can open a tax advantaged checking account for your IRA LLC at the bank of your choice, write your own checks, and make your own deposits. All for the option to invest in alternative assets that wouldn’t otherwise be available to you, such as real estate, private placements, tax liens, precious metals, cryptocurrencies, and almost anything else you can think of.
When weighing the pros and cons of a Self-Directed IRA with Checkbook Control, be sure to consider how exactly you prefer to make investments. If autonomy and freedom is most important to you, then you should enjoy how a Self-Directed IRA with Checkbook Control places your retirement entirely in your hands. Free from influence of factors outside of your control. Free to secure your financial future exactly how you know you can.