Annual contribution limits apply (check IRS.gov for current year limits and catch-up provisions) Rollover funds from a 401(k) or other retirement plan when changing jobs Backdoor Roth strategy: make non-deductible contribution then convert (beware pro-rata rule) Mega Backdoor Roth uses after-tax 401(k) contributions — requires employer plan support

SDIRA Investment Opportunities

Real estate (rental property, raw land, commercial) is the most common SDIRA investment Private company stock — useful for startup employees who understand the company Precious metals, tax liens, promissory notes, and certain cryptocurrency Best suited for assets where you have genuine expertise and informational advantage

Prohibited Transactions and Rules

Cannot invest in life insurance, S-corporation stock, or collectibles (art, antiques, gems) No self-dealing: you cannot transact with yourself, your spouse, or close family members Cannot personally use SDIRA property (e.g., vacation in an SDIRA-owned rental) Violations can result in the entire IRA being treated as distributed — triggering taxes and penalties

SDIRA Risks and Costs

UBTI and UDFI taxes may apply when the IRA uses debt financing or invests in operating businesses Higher custodian fees including annual charges, transaction fees, and asset-based fees Illiquid investments may be difficult to value and hard to sell when you need distributions Increased fraud risk — the SEC warns SDIRAs are frequently used in investment scams

SDIRAs make sense only if you have genuine expertise in alternative asset classes Understand prohibited transaction rules thoroughly — violations are costly and irreversible Factor in higher fees, illiquidity risk, and UBTI/UDFI tax implications Work with both a specialized custodian and a tax advisor experienced in SDIRA rules

Self-Directed IRAs (SDIRAs)

Curated by: Rubric Advisors

1 / 6

What is a Self-Directed IRA?

An IRA held at a specialized custodian that permits alternative asset investments
Standard brokerage IRAs typically offer stocks, bonds, ETFs, and mutual funds
SDIRAs expand the universe to include real estate, private equity, precious metals, and more
Account holder directs investment decisions while the custodian handles administration

Public Markets Private Markets Direct Indexing

Try Our Free Tools

Growth Visualizer Asset Class Explorer Risk Assessment

What is a Self-Directed IRA?

IRA Funding Options

SDIRA Investment Opportunities

Prohibited Transactions and Rules

SDIRA Risks and Costs

Key Takeaways

Related Topics

Fund of Funds: Diversified Access to Alternative Investments

Introduction to Alternative Investments

Investing in Venture Capital

What is a Self-Directed IRA?

IRA Funding Options

SDIRA Investment Opportunities

Prohibited Transactions and Rules

SDIRA Risks and Costs

Key Takeaways

Related Topics

Fund of Funds: Diversified Access to Alternative Investments

Introduction to Alternative Investments

Investing in Venture Capital