The key responsibilities for the investor are doing due diligence and research as to the types of investments and specific investments they will make. Vetting the investments before making a decision is not up to the custodian/administrator in this case.
Charlotte, NC (PRWEB)
September 20, 2017
A Self-Directed IRA account is simple: like any other retirement account, it allows investors the tax protections they need to build a healthy retirement strategy. But when self-directing such an account, investors have to take on many of the responsibilities of their own strategies. The rest is handled by a “custodian” or Self-Directed IRA administrator—and understanding which responsibilities lie where is at the heart of a new blog post by Jim Hitt, CEO of American IRA.
According to Jim Hitt, the key responsibilities for the investor are doing due diligence and research as to the types of investments and specific investments they will make. Vetting the investments before making a decision is not up to the custodian/administrator in this case. Firms like American IRA, Jim Hitt notes, are not financial advisors that tell investors where to park their money.
The role of the Self-Directed IRA custodian can seem nebulous at first, and they aren’t always wide-ranging, but they are important. For example, Jim Hitt points out, the administrator of a Self-Directed IRA is responsible for disbursing the funds as directed by the account owner—a role that keeps the IRA separate and worthy of its tax protection while ensuring that the owner remains fully in charge of what goes on.
“What I wanted to accomplish with this article was to show investors that with a Self-Directed IRA, they can accomplish a lot,” Jim Hitt said. “But there’s that old saying—with more power comes more responsibility. That’s also the case here. It’s up to the investor to find a broker for a real estate transaction, for example. The administrator is not there to handle every single transaction, but rather to serve as a third-party for the basic tasks that make the account possible. The key is understanding that ‘Self-Directed’ is not just a name. It truly reflects the nature of these retirement accounts.”
The blog post goes…