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Self-Directed IRA Setup: How Long Does it Take?

How long does it take to set up a self directed IRA

The IRA Financial Group will take care of setting up your entire Self-Directed IRA or Self-Directed IRA LLC structure in a matter of days. Our in-house tax and ERISA professionals will work with you directly to customize a structure that satisfies your tax and investment goals. Best of all, the entire process can be done through our app.

What is a Self-Directed IRA?

If you’re an IRA investor who only invests in traditional assets (stocks, bonds, mutual funds, ETFs, etc.), you can expand your investment horizons into nontraditional assets with a Self-Directed IRA. These include:

In order to expand your investment opportunities, you must establish a Self-Directed IRA. There are two types of Self-Directed IRAs.

  1. Custodian-Controlled IRA
  2. Checkbook Control IRA

What’s the difference between the two? A custodian-controlled IRA is offered by some large financial institutions. However, they often restrict the types of investments you can make and you will need custodian consent on all investment decisions.

Whereas a checkbook control IRA is the true form of self-directing your individual retirement account. With checkbook control, there’s no need for custodian consent. You’re in charge of what investments you wish to make – when you want to buy and when you want to sell. It’s the ultimate retirement vehicle for IRA investors who want control and the opportunity to invest in alternative assets.

So, to clarify:

Self-Directed IRA Setup

Self-Directed IRA Setup

Setting up a Self-Directed IRA is easier than you may think. Let’s take a look at what it involves:

1. Choose an IRA Custodian or Trust Company

If you choose an IRA custodian, make sure they allow you to invest in alternative assets, like real-estate and cryptocurrency. Such an example is IRA Financial Trust. You gain checkbook control, and as a result, complete freedom to do what you want with your investments. Of course, you must always be aware of the prohibited transaction rules. Additionally, you should be aware of any fees a Self-Directed IRA custodian may charge. At IRA Financial, we charge a flat fee.

2. Fund Your New IRA

The second step in setting up a Self-Directed IRA (SDIRA) is to fund your IRA. You can do this one of three ways:

  1. Transfer – Transfer funds from one IRA to another. Your current custodian will transfer the funds to your new Self-Directed IRA passive custodian.
  2. Rollover – Do you want to move money from a qualified retirement plan to fund your SDIRA? You can do a direct or indirect rollover. The preferable option is a direct rollover of retirement funds. The funds from your previous IRA go to your new custodian – not to you.
  3. Contribution – This is an option, however it’s not very common. Because IRA contributions are so low ($6,000 for 2019), a transfer or rollover is the preferable solution.

The two preferable options to fund your IRA

Self-Directed IRA Setup
Self-Directed IRA Setup

3. Establish an LLC (Limited Liability Company)

You will need to form an LLC, also known as a limited liability company. The IRA owns the LLC, but you’re the manager. Your funds are transferred to the LLC and this how you can make investments (through the LLC).

4. The LLC Operating Agreement

In order to accomplish a Self-Directed IRA setup, you will need the most important SDIRA document: the LLC operating agreement. It includes:

  • Special tax provisions regarding “investments retirement accounts” and “prohibited transaction rules” pursuant to IRC sections 408 and 4975.
  • Additionally, it will include special management provisions because the LLC is managed by a manger and not a member.

5. LLC Bank Account

The fifth step to setting up a Self-Directed IRA is to establish an LLC bank account. You will need a few documents to do this:

  • LLC article of formation
  • Tax ID number
  • Self-Directed IRA LLC Operating Agreement

6. Fund the LLC Bank Account

Let your IRA custodian know that you wish to have your funds sent to the new IRA LLC bank account. It will move over tax-free in exchange for 100% interest in the limited liability company.

Setting up a Self-Directed IRA usually takes approximately 10 days.

These are the six necessary steps to perform a Self-Directed IRA setup. With this structure, you will receive:

  1. Checkbook Control: Because you’re manager of the LLC, you receive checkbook control over your IRA funds/assets. You can make whatever investment you want (as long as it’s IRS approved) and you don’t have to rely on custodian consent.
  2. Tax-free Income & Gains: The LLC is owned by the IRA, therefore it will be treated as a disregarded entity. As a result, no federal income tax return is necessary. All income and gains from your investments are tax-free.

Setting-up a Self-Directed IRA with IRA Financial Group

At IRA Financial Group, we make the Self-Directed IRA setup fast and simple. We can handle it your way:

Our tax and ERISA specialists are on site and ready to answer all your questions. They will complete necessary IRA rollover or transfer paperwork. Additionally, they’re available to assist you in transferring your funds to the new passive custodian. As a result, your funds will be available in a matter of days.

Typically it takes anywhere between 7-21 days for your funds to be transferred to your new “Checkbook Control” Self Directed IRA LLC. In most cases, we are able to complete the IRA LLC facilitation aspects of the transaction within a few days.

However, the transfer of funds from one custodian to another can take some time depending on the financial institution and the type of assets being transferred.

Get in Touch

Do you still have questions about setting up a Self-Directed IRA? Contact IRA Financial Group directly at 800-472-0646. Or you can fill out the form to speak with one of our IRA specialists.


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