Invest in Businesses with Your IRA
Are you aware that you can invest in businesses using your retirement plan? You can if you have a self-directed IRA. Contrary to popular belief, IRAs are not limited to stocks, bonds, and mutual funds. Although it is common for investors to use their IRAs to buy these types of assets, with a self-directed IRA, you have additional investment options, including real estate, mortgages, private equity, and partnerships. In fact, more and more entrepreneurs are finding self-directed retirement plans to be a valuable tool to invest in a startup venture.
So how does this work? After you transfer your IRA funds into an Entrust self-directed IRA account, you simply direct Entrust to make the transaction through instructions specified in a Buy Direction Letter.
But keep in mind that you cannot invest in S corporations, nor can you directly or indirectly personally own more than 50% of or have a controlling interest in the business that your IRA is investing in.
Investing in a business is just one more alternative investment option available to you through a self-directed retirement account. Consult with your tax advisor to ensure that you are not participating in any prohibited transactions and other details that can affect your investment. And then take advantage of this great opportunity to explore and expand the wealth-building potential of your retirement funds.
Munzer Ghosheh is the Director of Business Development for Entrust IRA Services, a premier provider of self-directed retirement plans. He can be reached at mghosheh@theentrustgroup.com or 310-899-3811.