June 21, 2023

The Opportunities are BIG with a Self-Directed IRA in Texas

Written By: Daniel Gleich

Key Points 

  • Texas has no state income tax, magnifying the benefits of investing with a Self-Directed IRA.

  • With a Self-Directed IRA in Texas, you can invest in real estate, private placements, precious metals and more.

  • Texas is also a popular place to retire—in case you decide to stay put and enjoy your retirement savings where you feel right at home!

They say everything’s bigger in Texas, and that rings true of the investment potential for any Texan opening a Self-Directed IRA

From the openness of Amarillo to the glitziness of Dallas, and from the sights of San Antonio to the sounds of Austin—not to forget the state’s largest city, Houston, and nearby Gulf Coast beaches—Texas is considered one of the best places in America to work, live, play, and retire.

American and Texas state flags flying on the dome of the Texas State Capitol building in Austin.

Aside from the climate, culture, great food, and entertainment at every turn, Texas is also extremely wallet friendly. There’s no state income tax, property tends to be affordable, and the quality of life is generally higher than other populous states. Add the ability to invest in alternative assets with a Self-Directed IRA, and you’ll have the freedom to take advantage of the BIG investment opportunities in the Lone Star State. A Self-Directed IRA allows you to save for retirement in new and energizing ways, all in a tax-advantaged retirement account. With a Self-Directed IRA in Texas, you can:

Buy Real Estate

Everything you love about living in Texas is everything that leads others to want to move there. Job opportunities, typically lower housing costs, warm weather, big cities, and desirable suburbs are just a few of the reasons why Texas has seen steady population growth for many years. In fact, U.S. Census statistics show that Texas gained the most residents—over 9 million!—from 2000 to 2022. It’s the fourth fastest-growing state in the country. 

With a steady influx of individuals and families relocating to Texas, owning residential real estate may be lucrative when renting it out to tenants as property values rise. The state also has favorable tax laws for property owners, and an ever-expanding need for commercial real estate. Learn more about investing in real estate with a Self-Directed IRA in Texas.

Buy Land

Overhead view of farmland grass plots, which you can invest in with a Self-Directed IRA in Texas and across the USA.

Residential and commercial real estate aren’t the only types of property you can hold in a Self-Directed IRA. You can also use your Self-Directed IRA in Texas to buy land. According to the Texas Department of Agriculture, Texas has 127 million acres of farmland, the most of any state in the country. That’s not to mention all the other raw land available in the second largest state by square miles behind only Alaska. While Texas has plenty of people in its cities and towns, much of its land is untouched due to the state’s sheer size. Whether you intend to hold land or build on it, a Self-Directed IRA lets you get creative with your investment portfolio to grow your retirement savings.

Fund Businesses

You don’t just love living in Texas; you love living in your specific hometown in Texas. You have your routine, go at your pace, frequent your favorite spots, and feel connected to your community. Have you ever wanted to have a hand in local business opportunities? With a Self-Directed IRA, you can! That’s because a Self-Directed IRA allows you to invest in private businesses (also known as private placements), startups, and even crowdfunding opportunities. Have BIGGER ideas in mind? You’re not limited to investing locally.

Invest in Precious Metals

For anyone who’s wary of the stock market, precious metals investing can provide somewhat of a hedge. Can you own precious metals in an IRA? Yes, but only if it’s a Self-Directed IRA. Through your Self-Directed IRA, you can purchase gold, silver, platinum, and palladium. That includes the unique and annually released Texas Silver Round, which meets the 99.9% fineness requirement for privately produced silver to be held in a Self-Directed IRA. Read more about using a Self-Directed IRA for gold and silver.

Pile of gold and silver bullion, which can be invested in with a Self-Directed IRA.

Create an IRA LLC

For even more control of your retirement savings, you can open what’s called a Checkbook IRA. A Checkbook IRA is a Self-Directed IRA that gives you, the account holder, checkbook control. Checkbook control is the ability to write checks and send wires from your IRA without going through your custodian. Checkbook control requires the formation of an entity such as an LLC, which should then be linked to a checking account to keep retirement funds separate from personal funds during investment transactions.  

Setting up an IRA LLC in Texas is generally fast and easy, especially with the help of Madison Trust’s sister company, Broad Financial, as they specialize in LLC formation for Self-Directed IRAs. In Texas, LLC owners don’t have to file annual reports or pay flat annual fees. You’ll instead pay a franchise tax if your revenue is $1,230,000 or higher. If it’s lower as is the case for many investors, simply file a “No Tax Due Report.” See the benefits of an IRA LLC.

How To Open a Self-Directed IRA in Texas

Young, successful Self-Directed IRA account holders standing with a sunset background, holding coffee, and looking at a tablet with their self-directed investing strategy on it.

At Madison Trust, opening a Self-Directed IRA in Texas is as easy as 1-2-3: open, fund, and invest. We’re here to guide you through the process so you’re equipped with all the information you need to pursue BIG goals and dreams with your tax-advantaged retirement account for alternative assets. Learn more and get started today!

Disclaimer: All of the information contained in our website is a general discussion for informational purposes only. Madison Trust Company does not provide legal, tax or investment advice. Nothing of the foregoing, or of any other written, electronic or oral statement or communication by Madison Trust Company or its representatives, is intended to be, or may be relied as, legal, tax, investment advice, statements, opinions or predictions. Prior to making any investment decisions, please consult with the appropriate legal, tax, and investment professionals for advice.

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