Nonetheless, investors like Michael Glynn, a 56-year-old from the San Luis Obispo, California area, are bypassing traditional investments and opening self-directed IRA.

While these IRAs allow more investment options than a traditional brokerage account, there are substantial taxes and penalties if you don’t follow Internal Revenue Service guidelines, and some of the investments in them can be risky. Estimates from various sources calculate that investors hold 2 percent, or $94 billion, of IRA retirement funds in such self-directed IRAs. PENSCO Trust, another prominent firm that offers self-directed IRAs, has seen its accounts grow from about 11,000 to 18,000 over the last four years. And all of this is despite the suddenly buoyant stock market.Įntrust reports that the number of accounts it handles has expanded from roughly 10,000 to nearly 13,000 over the last three years. “And over the last couple of years, gold and silver bullion has become more popular as well.” Investment in private businesses and venture capital investing, he says, are also on the rise. “With the real estate market down, we’re seeing a lot of activity in investment real estate,” says Jason Craig, president of The Entrust Group, which specializes in self-directed IRAs that must be held at a custodial firm. They can buy real estate, invest in businesses, hold gold or silver bullion or even lease a herd of cattle. There’s a long list of caveats, but basically, investors can use a self-directed account to do much more than a traditional IRA that invests in mutual funds or bonds. An auctioneer and a bidder (L) discuss a foreclosed home in Newton, Massachusetts as local residents (R) walk past March 19, 2007.

Checkbook ira