What Most Investors Still Get Wrong About Checkbook IRAs
by Peter Rizzo
Even seasoned investors sometimes miss a few key details about how Checkbook IRAs really work. These accounts offer flexibility, speed, and control, but they also require some understanding to make the most of them.
Here are a few areas where investors often get things slightly off track and how to get them right:
Thinking “control” means “no structure”
One of the biggest misconceptions is that checkbook control means complete freedom. In reality, the structure still needs to follow clear rules. The power of a Checkbook IRA comes from having direct access to your investments, not from ignoring compliance. As Investopedia explains, structure and documentation are what keep your account’s tax benefits protected.
The good news? Once your IRA LLC or Trust is set up properly, the day-to-day process is smooth and straightforward.
Assuming setup is a one-time task
Some investors set up their IRA LLC or Trust and assume that’s the end of the story. In practice, a Checkbook IRA performs best when you stay organized: keeping records up to date, tracking transactions, and reviewing your entity annually. This article highlights that small administrative habits go a long way toward maintaining compliance and maximizing efficiency.
Forgetting to treat it like an investment business
When used strategically, a Checkbook IRA allows you to act like your own investment manager. Real estate, private lending, or other alternative assets all benefit from this flexibility. The key is to maintain the same due diligence and strategy you’d apply to any serious investment portfolio.
Overlooking how flexible it really is
Ironically, some investors underestimate what their Checkbook IRA can do. Once the structure is in place, you’re not limited to a single asset class. It can hold a mix of real estate, private equity, metals, and even crypto, all while staying within IRS guidelines. The goal isn’t to take on more risk, but to have more options when the market shifts.
Checkbook IRAs are designed for investors who like to stay hands-on and forward-thinking. When set up and managed with care, they can be one of the most versatile and rewarding tools in your retirement strategy; giving you both control and clarity over how your money grows.
