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Using a Self-Directed IRA for Real Estate Investments

If you have been following CalTier for any length of time, you have likely seen the term 'self-directed IRA' mentioned several times on our website or emails.

So what is a Self-Directed IRA?

Self-directed IRA's (or often called SDIRA for short) are self-directed individual retirement accounts that many people favor in conjunction with, say, a traditional Roth IRA.

The big difference with a self-directed IRA is that these accounts can hold various alternative investments, such a real estate or an investment into a company.

They are administered by a custodian company; however, as the owner of the account you decide where the monies are invested. These types of retirement accounts offer a very flexible way to take control of your investments.

What are the key advantages of a self-directed IRA?


As noted above, one major benefit to a self-directed IRA over, say, a traditional ROTH IRA, is that you can invest into assets such as businesses and real estate.

There are restrictions, and if you are seriously considering using a self-directed IRA for investments, you should speak to an investment professional about the details. However, items including life insurance and collectibles (like artwork etc.) are not permitted.

Ultimately you are in control of your finances and not a big corporation, but there are restrictions, and it's important to know them.


Let's say you want to invest in a business opportunity with someone you know, and time is critical. You can often literally write a check for the investment from the self-directed IRA account. Or you want to invest into a real estate fund like the CalTier Portfolio Fund online, you can do so with your debit card or wire money right from your self-directed IRA account. It's that easy.

Tax advantages

Like a traditional Roth IRA, there are significant tax advantages to using a self-directed IRA as a 'wrapper' in your portfolio. With a traditional Roth IRA most contributions are tax-deductible at source; however, with a self-directed IRA the gains you make are tax-free. So, take for example, an investment into the CalTier Portfolio Fund. The gains you might make each while invested in the fund are not taxed. They are tax-deferred.

When you finally make a withdrawal, it is considered taxable income.

What if I already have a Roth IRA with another company?

Great question. When you open up a CalTier account, you can sign up with our IRA partner, Alto IRA. It's all managed through the platform and within minutes, you will have an Alto IRA Self Directed Account set up.

Once this is complete, you can move monies from your traditional IRA into your new Self-Directed IRA and then into the CalTier Portfolio Fund.

That's it. Your self-directed investment will then be invested into the CalTier Fund.

What if I do not have an existing IRA set up?

When you signup to invest into the CalTier portfolio Fund you can create a new Alto IRA right there and then and move over the maximum permitted amount of $6,000. If over 50 years of age, the maximum is $7,000 per year.

Again, it's all handled online and our partner, Alto IRA will handle that for you.

If you would like to speak to our Self Directed Strategic Advisor, James Jones, please call 619 344 0291 or email and let the agent know you wish to set up a call with James.

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