401k rules: Manage a self Directed Ira

Have you been monitoring frequent downfall in your retirement account?My wife just collected her quarterly statement from her 401k and it showed a loss of more than 11% for the quarter.Her 401k restricts her to mutual funds ,she has no other choice thus became a prisoner to stock market period.

If you are fed up of observing your IRA spiral out of control then select a few IRA provider to get rid of stock market and invest in alternative investments.In reality IRAs can handle a wide variety of assets including real estate,precious metals and private business interests.

The Key Reason why you need it

There are many reasons why having a self directed IRA is a good idea. For most Americans their retirement accounts is where the bulk of their cash is. As a result, if you want to take advantage of an opportunity to make a large investment in something different like real estate or private businesses a self directed IRA has that flexibility.

You may have more profit potential in small start ups or in a foreclosure on real estate. Just as venture capitalists look to get in on the ground floor of a business with good concepts and ideas, using your IRA to make an early investment in a promising business can give you a huge advantage if your IRA is in your control.

What if you want to invest in real estate? It's hard to find stocks that give you the same type of exposure that owning a particular property gives you. You could buy publicly traded REITs but those are huge diversified companies with holdings nationwide which provides stability, but at the cost of profits.

What you should know

You need to know the rules of retirement accounts if you are going to take control of your retirement funds. First no self dealing, that means you are prohibited from benefiting from your retirements investments. If you own an asset like a beach front rental property, you can't use it for your own personal benefit. If you are considering borrowing to make a purchase in your retirement account you need to know the rules of extending credit and non recourse loans. Your personal funds cannot get comingled with your retirement funds.

What it comes down to is that you have a lot of money in an IRA and want to expand your investments beyond ordinary securities; a self directed IRA can help you do what you want with your money. It's your money and you should be in control of it.