How to Become a Self-Directed IRA Administrator
IRAs are a great way to save for retirement, but most people limit themselves to having stocks, bonds and mutual funds in their IRAs. You can also invest in things such as gold, real estate, collectibles and life insurance to create your retirement nest egg. This allows you to diversify your holdings and create better opportunities for high returns. To build your investments with these other assets, open a self-directed IRA with yourself as the administrator.
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Instructions
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Establish a self-directed account with a custodian. In the case of a self-directed IRA, a custodian is a company regulated by the Internal Revenue Service, state banking commission, state comptroller or Federal Deposit Insurance Corp. The regulation provides you with some asset protection, but the custodian is not an adviser. The custodian simply holds the assets for you and will process account paperwork related to transactions.
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Name yourself as the administrator. When you fill out the paperwork for the account besides noting that the account is a self-directed IRA, you will also note that you are the administrator of the account.
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Either make a deposit to the account or roll over an existing IRA to the account. You will use the money deposited into the account to make purchases of different assets under the IRA umbrella.
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Choose your investments. You need to conduct your own research and make your own decisions about what you invest in, but with a self-administered IRA, your options are greatly expanded. When you find one that you want to purchase, request funds from your account and fill out an investment form. The custodian will remit the funds and retain records of the transaction.
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Sell your investments. When you are ready to sell investments in your account, fill out a sell investment form. This allows the custodian to sell the investment on your behalf and hold the funds in your account.
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