Self-Directed IRA Guide
A self-directed IRA can provide access to asset types not commonly offered in mainstream brokerage IRAs, but broader choice does not remove tax, custody or prohibited-transaction rules.
Key Takeaways
- Verify tax and custody rules using primary sources before moving retirement assets.
- Compare total costs, including dealer transaction economics, not just the annual account fee.
- Know the storage and liquidation process before authorizing a precious-metals purchase.
What Self-Directed Means
“Self-directed” generally describes an IRA administered by a custodian that permits a broader set of investments than a conventional brokerage IRA. It does not mean the owner can ignore IRA custody or prohibited-transaction rules.
More Choice Means More Due Diligence
Alternative assets can involve valuation, liquidity, custody, fraud and administrative risks that are less familiar than publicly traded securities.
Custodian Acceptance Is Not An Endorsement
A custodian may process an investment without evaluating whether it is economically attractive or suitable. Investors remain responsible for understanding the asset and counterparty.
Precious Metals Are One Use Case
Qualifying precious metals are one category that can be held under applicable IRA rules. The same self-directed structure can be used for other permitted alternatives, subject to the custodian's policies.
What A Gold IRA Actually Is
A Gold IRA is a common industry term for an IRA—often a self-directed IRA—that holds qualifying physical precious metals. The tax treatment comes from the IRA structure, not from gold itself. That distinction matters because the account, the custodian or trustee, the specific metal, and the storage arrangement all need to fit applicable rules.
The Four Parts To Understand
Think in four layers: the retirement account, the custodian or trustee, the precious-metals dealer, and the storage arrangement. One company may help coordinate several steps, but the legal and commercial roles are not necessarily the same.
Costs And Tradeoffs
Physical metals can involve setup, administration, custody, storage, dealer premiums or spreads, and liquidation economics. Compare the total ownership experience rather than one advertised annual fee.
Questions Worth Asking
Ask who the custodian is, where metals are held, which products qualify, what every recurring and transaction cost is, how distributions work, and how you would liquidate the position later.
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Primary Sources
- IRS: IRA FAQs And Precious-Metals Rules
- IRS: Rollovers Of Retirement Plan And IRA Distributions
- IRS Publication 590-A