Controlling Your Retirement with a Self-Directed IRA

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“Self-directed retirement accounts are new to a lot of people, but they aren't new at all since retirement accounts have been around since 1974.” -Edwin Kelly Click To Tweet


Edwin Kelly from Specialized IRA Services is here today to talk about the advantages and flexibility with a self-directed IRA. Whether you need income or tax savings, there are savings and investment vehicles that can help you meet your goals that aren’t tied to the ups and downs of the market.

Today, he talks about how everyone needs a customized plan that fits their circumstances, and he talks about the benefits of using a Roth to withdraw tax-free income. It’s also possible to make creative investments like real estate. You are in the driver’s seat and can invest in anything that is legally allowed by the government.

“Anyone who has a company-sponsored retirement plan is used to only having 5 to 10 mutual fund options. If they don't like those options, the company doesn't give them any other alternatives.” -Edwin Kelly Click To Tweet

You can find Edwin here:

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Show Notes

  • Stock exchange[01:12] Edwin is a custodian of IRAs.
  • [01:36] When he was young, he read and studied about some of the great businessmen.
  • [01:55] He knew he wanted to be in business, and he was looking for a niche.
  • [02:01] From study, he noticed that starting a business in a new industry allows your business to expand as the industry expands.
  • [02:14] He wanted to find something that would solve serious financial problems and seemed new. He discovered self-directed retirement accounts although they weren’t really new.
  • [02:51] Company-sponsored retirement plans haven’t worked as well for people as they thought they would, because of company limitations on investments.
  • [03:27] A self-directed space allows someone to get complete control over their retirement account and invest in anything allowed by the government. The possibilities are endless.
  • [03:35] Edwin found that there wasn’t a company doing what he was trying to do and he wanted to enable people to be able to invest in what they wanted.
  • [04:01] There is some confusion about self-directed IRAs. There’s what people call self-directed and then there is truly self-directed.
  • [05:09] Most investment banks offer a self-directed fund where you can pick anything that they offer. This is limited to stocks, bonds, mutual funds, and CDs.
  • [05:18] A better question to ask is can you buy a foreclosed property with your retirement account and have your retirement account pay to fix it up and then put a tenant in there and collect rent tax free.
  • [05:49] A true self-directed retirement account has a custodian who allows you to invest in anything that the government allows you to invest in without restrictions.
  • [06:24] There are probably less than 30 firms who specialize in what Edwin’s firm does.
  • [07:43] The government tells you what you can’t do. You can’t buy life insurance inside your retirement account. You can’t buy collectibles and no self-dealing. Most everything else is allowed.
  • [10:27] At Specialized they create custom plans for their clients. They use individual retirement accounts. Small business retirement plans like solo 401(k)s. The last category is tax-advantaged specialty accounts.
  • [12:25] The Roth vehicle is the only one that allows us to go from forever tax to never tax. All income is not subject to tax.
  • [14:34] You can invest in an LLC and it can hold all kinds of assets.
  • [16:02] Self-directed retirement accounts are going to be part of your picture not all of the tools. Look at your rate of return and see where it makes sense to put something into a retirement account. Consult with an expert and optimize.
  • [20:10] Edwin gives an example of the power of compound interest.
  • [23:40] An example of a 53 year-old attorney who opened a Roth late. He then built a real estate portfolio within that Roth using leverage. His monthly distribution is now $40,000 a month tax free. He built that in 14 years.
“A self-directed space allows someone to get complete control over their retirement account and invest in anything allowed by the government. The possibilities are endless.” -Edwin Kelly Click To Tweet

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