Is a Checkbook IRA Right for You? A 5-Point Self-Assessment
by Peter Rizzo
For many investors, retirement accounts feel locked down. You contribute, pick from a short menu of investments, and hope the market treats you kindly. But what if you want more control? A Checkbook IRA, whether structured as an LLC or Trust, puts the decision-making in your hands. The real question is: is this level of freedom right for you?
Here’s a 5-point self-assessment to help you decide.
- Do you value investment flexibility?
With a Checkbook IRA, you are not limited to mutual funds or publicly traded stocks. You can pursue real estate, private lending, precious metals, and other IRS-approved assets. If you want your retirement funds working in places beyond Wall Street, flexibility is the first green flag.
- Are you comfortable with responsibility?
Traditional custodians handle the recordkeeping and transaction approvals. A Checkbook IRA gives you direct control, which also means more responsibility for compliance with IRS rules. If you are organized and detail-oriented, this control can be a strength.
- Do you want faster access to deals?
When you manage an IRA LLC or Trust, you can write checks or initiate transactions directly. No waiting for custodian approval, which is especially valuable in competitive markets like real estate. For time-sensitive opportunities, the speed advantage is significant.
- How important is cost efficiency to you?
Custodian-controlled IRAs often come with transaction fees for every move. With a Checkbook IRA, most of those fees disappear once your structure is set up. Over the years, the savings can add up, especially for active investors.
- Are you prepared to follow the rules?
The IRS prohibits certain transactions and dealings with disqualified persons. For example, you cannot buy property to live in or lend money to yourself or family members. If you are comfortable operating within these guardrails, a Checkbook IRA can open doors without crossing lines.
Putting it all together
If you nodded “yes” to most of the questions above, a Checkbook IRA (structured as either an LLC or Trust) may be the right fit. It combines flexibility, speed, and cost savings, while giving you the power to diversify your retirement portfolio.
We help investors set up IRA LLCs and Trusts so they can take charge of their retirement future with confidence. Email [email protected] for more information or call 1-800-482-2760.
