Financial Benefits of Self-Directed Retirement Investing

Self-Reliance

You know the value of being self-reliant and taking control of your future. That mindset applies perfectly to self-directed retirement investing. Unlike cookie-cutter retirement accounts that lock you into traditional investments like stocks and bonds, self-directed accounts put you in charge, offering a world of possibilities to grow your wealth your way.

Here’s a closer look at why self-directed retirement accounts might just be the ultimate financial tool for building a secure future and protecting what you’ve worked so hard to achieve.

Let Your Money Work Harder: The Power of Compounding Interest

We’ve all heard it—time in the market beats timing the market. But here’s the real kicker: when you invest through a self-directed account like a Roth IRA, your gains grow completely tax-free.

Think about it. In a taxable account, Uncle Sam takes a cut of your earnings every year. With a Roth IRA, you pay taxes upfront, and then your investment grows tax-free. That means compounding can do its magic without interruptions. Over decades, that’s a game-changer. It’s the difference between a nest egg and a golden goose.

For example, an investment that doubles every 10 years could grow significantly larger in a Roth IRA than in a taxable account. Why? Because no taxes are eating away at your gains year after year.

Go Beyond the Usual: Investing in What You Believe In

Tired of the same old stock-and-bond routine? Self-directed retirement accounts let you invest in what matters to you. These accounts open the door to alternative investments that can add diversification and growth potential to your portfolio.

Here are just a few options:

• Real estate: rental properties, commercial buildings, or even raw land
• Private real estate partnerships and syndications
• Cryptocurrencies like Bitcoin and Ethereum
• Gold, silver, and other precious metals
• Private loans, promissory notes, and venture capital

The best part? You call the shots. Whether it’s a downtown duplex, a tech startup, or a stack of gold bars, you can put your retirement dollars to work in ways that fit your goals and passions.

Protection You Can Count On

One thing Gen Xers understand is the importance of protecting what you’ve earned. Self-directed accounts come with built-in safeguards, especially when it comes to shielding your assets from creditors.

Federal law provides strong protections for ERISA-qualified accounts like most 401(k)s, and while IRAs aren’t covered under ERISA, they’re still protected in bankruptcy up to $1,512,350 (as of 2024). Depending on where you live, state laws may offer even more protection for IRAs, helping to guard your retirement savings from lawsuits and judgments.

Want to sleep better at night? Knowing your retirement funds are protected is a good place to start.

Avoid Probate Hassles for Your Loved Ones

Here’s something no one talks about enough: a self-directed account can help your heirs avoid the drawn-out, expensive probate process. When you set up your account properly and name beneficiaries, the assets in your account go straight to them when the time comes—no probate court, no delays, and no public record.

It’s a simple step that can save your loved ones a lot of headaches while ensuring your hard-earned assets end up exactly where you want them.

The Bottom Line

You the value of having options and staying in control. Self-directed retirement accounts offer exactly that—a way to grow your money, protect your assets, and invest in what you believe in. They’re a powerful tool for anyone looking to take retirement planning into their own hands.

If you’re ready to shake up your retirement strategy, now’s the time to dive in. Consult a tax professional to make sure you’re following the rules and contact your self-directed company to make sure you're getting the most out of your account. Then, take charge and start building the future you want.

Because when it comes to your money, nobody’s got your back like you do.