Self Directed IRA Fees
Here’s what you need to know
Self Directed IRA fees typically fall into one of two categories: asset based and flat. The differences between the two can have huge implications for your retirement investing.Fee Questions? Contact a Madison Specialist
Asset fees are charged based upon the value of an IRA. Custodians that work with this kind of fee schedule typically charge somewhere in the arena of .26% of the IRA’s total value. This fee is charged annually and usually in the first quarter.
A flat fee schedule charges a set amount for holding the IRA and it doesn’t change based on asset value. This fee is often charged on a quarterly basis.
Which fee schedule is better for your Self Directed IRA?
Let’s run some numbers. If we are dealing with a Self Directed IRA valued at $250,000, then the annual fee for that account would come out to $650. If the IRA grew in value to $400,000, then the annual fee would adjust accordingly to $1,040.
If we run the same numbers for a flat fee schedule, the results are remarkably different. Madison charges a flat fee of $75/quarter which comes out to an annual fee of $300. This is true no matter how much your Self Directed IRA increases in value. (That’s why it’s called flat.)
For most IRA accounts the flat fee schedule will typically save you hundreds of dollars per year. There are a few cases where extremely active accounts may do better with a different fee structure. However those are usually served better by a Checkbook IRA.
There are two basic fees for a new Madison Trust client. The first is a $50 set-up fee. This is a one time charge. The second is the $75 quarterly maintenance fee which includes the holding of one asset.
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