Private Placements: 
Using a Self-Directed IRA for Private Placements

Private placements typically have a three-to-five-year holding period before an investor can cash out or liquidate their position. This holding period encourages the use of IRA funds (rather than personal funds) for private placement investing. While it is important to have real-time access to personal assets, retirement assets can be "locked up" for a period due to IRS-imposed inaccessibility. In most cases, the retirement funds may not be accessed until the retirement age of 59.5. But savvy investors understand that many private placement investments have a high risk/high reward ratio and would like to see any possible appreciation take place in a tax-advantaged account.

Eligibility
Public companies are traded on the open market and are regulated by the Securities and Exchange Commission. Private Placements are not as highly regulated and generally require investors to be accredited because of the additional risk involved. 

Due Diligence
Before investing in a private placement, investors are encouraged to do their due diligence and consult with a financial professional to determine whether the investment is a good fit for their financial situation.

Create a 
Self-Directed IRA

To establish a Self-Directed IRA, contact a Self-Directed IRA custodian and complete the account application.

Transfer Funds Into The New Self-Directed IRA

Account holders may transfer funds from an existing IRA or roll over funds from a former employer’s plan, such as a 401(k) or 403(b).

Invest In The Asset Of Your Choice

Instruct your Self-Directed IRA custodian to invest your IRA funds into the private placement of your choice.