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Self-Directed Retirement Funds

A self-directed IRA allows investment in a wider variety of assets than most traditional IRAs typically permit.

Commonly referred to as self-directed individual retirement account.

Do I Qualify for a Self Directed Retirement Funds?

A self-directed individual retirement account (SDIRA) is an individual retirement account in which the investor is in charge of making all the investment decisions.

2022 Self Directed Retirement Funds Details

A self-directed individual retirement account (SDIRA) is an individual retirement account (IRA) in which the investor is in charge of making all the investment decisions. The SDIRA provides the investor with greater opportunity for asset diversification outside of traditional stocks, bonds and mutual funds. Self-directed IRAs can invest in real estate, private market securities and more.

Self-Directed IRA Custodians

All securities and investments in an SDIRA are held in an account administered by a custodian or trustee. A custodian or trustee is the company (typically a financial institution) that administers the retirement plan, chosen by the investor.

Contribution Limits

Annual individual contributions to SDIRAs cannot exceed maximum contribution limits, which are determined annually by the IRS. If you’re 50 or older, you can contribute an additional amount per year using catch-up contributions.

Self-Directed Retirement Funds

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• Like traditional IRAs, SDIRAs allow current year tax deductions.
• Earnings in an SDIRA accumulate tax-deferred.
• There is great flexibility with the types of investments allowed.


• Fund distributions before age 59½ can be subject to a 10% early withdrawal penalty.
• Like a traditional IRA, SDIRA distributions are subject to tax at ordinary income tax rates.
• There are income limits to deductible IRA contributions.
• Self-directed IRA custodians usually offer very limited investor protections compared to traditional IRA custodians.
• The investor bears greater responsibility for due diligence research on investments.
• Conflicting strategies: SIMPLE IRA for Individuals, SIMPLE 401(k) for Individuals

Assumptions When Taking the Self Directed Retirement Funds

• The taxpayer and spouse wish to make the maximum SDIRA contributions.
• Income is below IRA annual contribution limits.

Conflicting Strategies

• SIMPLE 401(k) (Individual)
• SIMPLE IRA (Individual)

Requirements to Claim the Self Directed Retirement Funds

• The taxpayer must identify a custodian or trustee that handles SDIRAs and follow the procedures to create an account.

Business Entities That Can Claim the Self Directed Retirement Funds

• Individual

The material discussed on this page is meant for general illustration and/or informational purposes only and is not to be construed as investment, tax, or legal advice. You must exercise your own independent professional judgment, recognizing that advice should not be based on unreasonable factual or legal assumptions or unreasonably rely upon representations of the client or others. Further, any advice you provide in connection with tax return preparation must comply in full with the requirements of IRS Circular 230.

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