How long have self-directed IRAs and real estate IRAs existed?

Self-directed IRAs have been permitted since 1975 as part of the Employee Retirement Income Security Act of 1974 (ERISA) and the creation of IRAs. At that time, qualified plans, such as defined benefit, profit sharing, and money purchase pension plans, were considered self-directed IRAs. Initially, the investments of choice were most commonly real estate and notes.

Over time, the self-directed portion of the retirement industry has become more recognized and accepted as an investment diversification strategy because investors can purchase a wide variety of assets. Many investors are venturing beyond real estate and notes to other options that comply with the federal rules of permitted transactions.

What is a self-directed IRA or real estate IRA?

The term "self-directed" simply means that you, as an individual, have complete control over selecting and directing your individual retirement account investments. With a self-directed account, you can buy real estate, notes, limited partnerships, commercial paper, and many other types of assets. You make all decisions regarding your investments.

A Real Estate IRA is a self-directed IRA that holds real estate.

With a self-directed IRA or real estate IRA, you are not limited to the investment offerings of an IRA custodian or trustee. By using Entrust as the administrator for your self directed IRA account, you have much greater flexibility in the number of investment choices you have. You are not limited to investing in stocks, bonds or mutual fund investments that are set up by the custodian.