Invest Beyond Wall Street

A Self-Directed IRA (SDIRA) is an individual retirement account held by a custodian that lets you invest in alternative assets such as real estate, private placements, promissory notes, and more.

Diversify Your Portfolio

Self-Directed IRAs give you, the investor, the power to diversify your portfolio, invest in what you know and believe in, and hedge against the stock market.

Low Fees

The fees for a Self-Directed IRA held at Madison Trust are among the lowest in the industry - and are set at a fixed rate regardless of the value in your account. 

Simple Set Up

There are three simple steps to setting up a Self-Directed IRA: open an account, fund the account, and place an investment.

Among the lowest in the industry, Madison Trust offers competitive flat fees - set at a fixed rate regardless of the value of your account. For more information, visit our Fee Schedule.

At Madison Trust, we make your Self-Directed IRA setup fast and simple. Once you fill out our easy online application, it typically takes about one to two weeks for your Self-Directed IRA to be funded.* Once your account is opened and funded, simply place an investment by instructing Madison Trust to invest in the asset of your choice.

*Please note, our processing timeframe does not include the transferring institution’s processing time. Turnaround time and delivery method back to Madison Trust is subject to the external institution’s processing times and procedures.

Yes, you can roll over your 401(k) into a Self-Directed IRA. You can rollover all – or a portion - of your funds. To do so, you will start the process by contacting your existing 401(k)’s plan administrator. For more information, view The Quick Guide to Funding a Self-Directed IRA with your 401(k).

When you invest with a Self-Directed IRA, all income from an investment returns directly back to the Self-Directed IRA without being taxed and without being added to your personal taxable income for that year. You can reinvest these earnings into another opportunity and keep growing your retirement savings in a tax-advantaged environment.

Like standard IRAs, potential tax benefits vary depending on your Self-Directed IRA account type. If you have a Self-Directed Traditional IRA, you can lower your income tax owed when you contribute to your account. If you have a Self-Directed Roth IRA, you pay taxes upfront, but you can take out your earnings tax-free in retirement.

Yes! All Self-Directed IRAs must be held by a custodian. A Self-Directed IRA custodian is responsible for administering the retirement account and holding custody of the IRA’s assets. Self-Directed IRA custodians allow account holders to invest beyond Wall Street and into alternative assets such as real estate, promissory notes, private placements, precious metals, and more. Visit The Guidelines on How To Choose the Right SDIRA Custodian.

Yes! Just like a standard IRA, anyone can open a Self-Directed IRA. To contribute to a Self-Directed IRA, the investor must earn taxable income. For more information, visit our blog Can Anyone Open a Self-Directed IRA?

The contribution limits for a Self-Directed IRA are the same as a standard IRA. If you are younger than 50 years old, you can contribute up to $6,500 in 2023 ($6,000 in 2022). If you are age 50+, you can contribute up to $7,500 in 2023 ($7,000 in 2022). Contributions for the year prior must be made by the tax filing deadline. For more information, visit Contributions FAQs.

In addition to annual contributions, Self-Directed IRA account holders may also roll over or transfer all – of a portion of – your funds from an existing qualified retirement account such as an IRA or 401(k).

As a Self-Directed IRA account holder, you are not required to use an LLC to invest in an alternative asset. Depending on your specific investments’ needs, establishing a Self-Directed IRA LLC may be beneficial. An IRA LLC enables you to invest your retirement money directly into the investment of your choice without having to contact your custodian for everyday transactions. IRA LLCs are optimized for transaction-heavy investments, such as real estate rentals and fix-and-flips.

As a Self-Directed IRA account holder, you do not need to file an annual tax return. However, each year you must provide your Self-Directed IRA custodian with the fair market value (FMV) of your account. Visit IRS Tax Tips for Retirement Accounts for more information.

Your Self-Directed IRA would likely owe taxes is if it generated business or trade income that is not related to the tax-exempt purpose of the organization (Unrelated Business Income Tax) or when debt is leveraged to purchase an asset (Unrelated Debt Financed Income).

A prohibited transaction is a transaction that involves the account holder or other disqualified persons benefiting from the IRA’s investments. A good rule of thumb is that an IRA may transact with third parties but may not transact with close family members or closely held entities.

To start withdrawing funds from your Self-Directed IRA you must be at least age 59 ½. If you opened a Self-Directed Traditional IRA, you must take required minimum distributions (RMDs) each year after you turn age 73. Self-Directed Roth IRA account holders are exempt from taking RMDs, since taxes are paid upfront.

To receive funds earned through your Self-Directed Roth IRA investments without penalty, you must reach age 59 ½ and have the account opened for at least five years. Self-Directed Roth IRA contributions can be withdrawn at any time.

To learn more about distributions, visit Self-Directed IRA distribution rules.

To make a distribution from a Self-Directed IRA, complete a Distribution Request Form that details the distribution type, amount, and frequency of the distribution. If you are distributing an asset, please also submit a third-party certified value (i.e., an appraisal, letter from an investment sponsor, CPA-certified valuation, etc.). Depending on the asset, additional documents may also need to be submitted.

After the documents are submitted and approved, Madison Trust will send an Assignment of Interest to you. This documents the transfer of ownership from your IRA to your personal possession.