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Investors Have a Lot to be Thankful for with Self-Directed IRAs

Published on November 17, 2022

Self-directed IRAs have been around since the inception of IRAs in the 1970’s. While there is still much that is misunderstood about them, they provide a world of benefit to savvy investors who are comfortable making their own investment decisions. As we look to the Thanksgiving holiday, we’d like to highlight those benefits, which show why the many investors currently using self-directed IRAs have a lot to be thankful for.

The broad array of alternative assets these plans allow enable individuals to build a more diverse retirement portfolio. The importance of this cannot be overstated in these turbulent times for the stock market. Countless investors whose portfolios are locked into stocks, bonds and mutual funds have seen balances plummet, then rise a bit and drop again this year. We all know that what goes down eventually comes back up (and vice versa), but creating a hedge against this stock market volatility through self-directed investments is an excellent strategy.

Alternative assets tend to not correlate with the stock market. While traditional investors are wringing hands over poor stock performance, owners of self-directed IRAs can enjoy many happy tax-advantaged returns from real estate, private stock or venture capital, gas and oil, and many other nontraditional investments.

All types of retirement plans can be self-directed with alternative assets. The types of plans that you would typically be able to open through a brokerage can also be self-directed. This includes Traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, Solo 401(k)s and even ESAs (Education Savings Accounts) and HSAs (Health Savings Accounts). The main difference between a “self-directed” account with a brokerage and a “self-directed” account with a custodian like Next Generation are the types of investments that can be included within them to build retirement wealth.

The flexibility, creativity, and agility that self-direction offers investors is unparalleled. Self-directed investors can take advantage of investment opportunities as they arise with greater ease. And they can include a personally selected mix of assets that closely align with their values, knowledge or expertise, and retirement savings goals. As we stated above, individuals who are comfortable making their own investment decisions are most grateful for the added control they have over their investment returns afforded through this strategy.

What is Next Generation thankful for?

Since our founding in 2004 as a third-party administrator of self-directed retirement plans, Next Generation has helped countless investors build their retirement savings through self-direction. In 2017, we launched Next Generation Trust Company, our custodial arm, to better serve our clients with full administration and custodial services under one corporate umbrella. We are thankful to all the people who have opened accounts with us and helped us grow, to the expert collaborators with whom we have provided client education, and to the many individuals who have referred our firm to investors wishing to self-direct their retirement portfolios.

It brings us an abundance of joy knowing that each and every day we help individuals achieve the retirement goals they once dreamed of by providing best-in-class education on self-direction as a retirement strategy and exceptional customer service.

From all of us, thank you.