Self Directed Pensions

So you have an IRA, either traditional or Roth. It is with a broker like Charles Schwab. All they will let you invest in is mutual funds, stocks, bonds etc. In other words THEIR products. They have no interest in you taking YOUR money out and investing it in other assets such as real estate, tax leans, or startup companies.

So how do you get control over your IRA?

The process is simple, using an approved third party they sweep all or part of the money from your IRA. A LLC, limited liability company, is formed in whatever State suits your needs. The LLC opens a checking account. It could be at a bank or a checking/brokerage account such as Schwab One. The third party then purchases stock in the LLC and sends the funds to the checking account. In other words your IRA owns the LLC. The LLC can invest in whatever it likes within the IRS rules.

Can I do this by myself? Yes, but there are so many legal issues which if there is one mistake it could invalidate the IRA and the IRS might force you to close the IRA and you would pay the 10% penalty. Not a good idea. But the good news is that there are many companies who can do this for you. They will take care of everything, and even give you advice on what is permitted. They are there to make sure your IRA/LLC is operated within the IRS rules. You get checkbook control and can make investments that suit your retirement needs, reduce the risk of being limited to the stock market and other financial products.

The writer has a IRA/LLC for both the Traditional and Roth IRAs.