Self-Directed IRA Basics

Self-Directed IRA Basics

What is a Self-Directed IRA?

A Self-Directed IRA is an IRA in which you, the account-holder, are in charge of making all investment decisions.  A self-directed IRA provides you with greater opportunity for asset diversification outside of the more traditional stocks, bonds, and mutual funds.  A Self-Directed IRA enables you to invest your retirement money into (almost) any alternative investment.

What can a Self-Directed IRA invest in?

Self-Directed IRA investments range from – the more popular – real estate, IRA LLCs, small businesses, private loans, non-publicly-traded funds, and precious metals to – the more exotic – cattle, timber, soy beans, solar farms, and race horses.  At Madison Trust Company, we hold more than 100 different types of alternative investments on behalf of our clients.

How come I never heard about this before?

That’s because 97% of retirement accounts are held by the traditional brokerage houses (e.g. Fidelity, Vanguard, and Schwab) who generally only hold stocks, bonds, and mutual funds. Only 3% of retirement accounts are held by Self-Directed IRA Custodians like Madison Trust Company and are invested in alternatives.

How does it work?

Setting-up a Self-Directed IRA at Madison Trust Company is a simple 3-step process:

Step 1:  We assist you in opening a new Self-Directed IRA.

Step 2:  We assist you in transferring – all or a portion of – your existing retirement money to your new Self-Directed IRA.

Step 3:  We invest your retirement money directly into your investment.

It’s as simple as that.

What does it cost?

The basic set-up is $100 ($50 to open your account and $50 to place your investment).  Thereafter, we charge a fixed quarterly fee of $75 to maintain your Self-Directed IRA.  At Madison Trust Company, our fees are flat-rate; they’re never asset-based.  We don’t believe that asset-based holding fees need to be charged to provide outstanding customer service. Our clients all pay the same flat-rate annual fee regardless of the amount in their IRA.

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