Your Step-By-Step IRA Guide

This exclusive step-by-step guide will walk you through everything you need to know about self-direction, from the different types of accounts you can choose, to the funding strategies, and investments allowed. We've assembled our best resources including our most essential reports, articles, videos and more to walk you through the world of self-directed IRAs.

1. Welcome

We are The Entrust Group, the premier provider of account administration services for self-directed retirement plans, and we want to welcome you to an investment strategy used by insider investors: self-direction!

Hubert Bromma, founder and CEO of The Entrust Group was a pioneer, bringing the concept self-directed IRAs to the public over 35 years ago. Since then, we have been an acknowledged authority in the industry, placing a high value on first-hand personal service and education for our clients.

We have a team of knowledgeable representatives to assist investors step-by-step in purchasing alternative investments with their retirement funds and administer the buying and selling of assets that are typically unavailable through banks and brokerage firms.

If you choose Entrust, know that we will be here to help walk you through the process of opening and funding your account, completing transactions safely and accurately, and everything in between. We make it easy to open an account online in under 10 minutes, and with our Entrust Client Portal and Learning Center, you’ll have resources to manage your account at your fingertips, 24-7.

Investor Tip:

Always make sure to conduct your due diligence when choosing a self-directed IRA company. To help you figure out what to look for when choosing an administrator to manage your retirement funds, read our Choosing Your Self-Directed IRA Company Guide here.

3. Choose Your Investment Strategy

It’s permissible for your IRA to invest in a variety of alternative assets — you just need a custodian that offers self-direction. With a self-directed account at Entrust, your IRA can purchase almost any alternative investment from real estate to precious metals, or even livestock. Keep in mind, self-directed IRAs follow the same rules governing IRAs and the IRS does limit the types of alternative investments you can hold in your retirement account.

The three most popular investments our investors choose include:

STOP!

A Few Rules to be Aware of Before Investing

There are only three types of investments that are not permitted within a self-directed IRA: insurance, collectables (with some exceptions for coins and metals), and S corporations. Anything else is available to you through these retirement accounts, but certain IRS regulations apply. Failure to follow IRS rules can lead to prohibited transactions.

What is a Prohibited Transaction?

According to the IRS, a prohibited transaction is any improper use of your self-directed IRA account or annuity by you, your beneficiary, or any disqualified person. Many prohibited transactions stem from the involvement of a disqualified person.

The following people are considered disqualified persons for the purposes of your self-directed IRA. Click image to enlarge or download.

• You, the account owner
• A beneficiary of the IRA
• Your spouse
• Your lineal ascendants/descendants and their spouses
• Plan service providers and fiduciaries (including advisors, custodians, and administrators)
• An entity (corporation, estate, partnership, etc.) in which you own at least 50% of the voting stock, directly or indirectly.
• An officer, director or a 10% or more shareholder or partner.

Learn more about prohibited transactions and disqualified persons here.

Your Options are Unlimited with The Entrust Group

Why let your investment choices be limited by custodians who invest only in what they are comfortable with? Why not work with an administrator like The Entrust Group, an administrator that allows you to make the decisions with investments you know and trust?

A very important takeaway: be sure to do your due diligence before making any investment. Download our Due Diligence Guide to understand what it is, why it matters and how to do it well.

5. Opening & Funding Your Account

Opening and funding an account with Entrust couldn't be easier with 3 quick steps. You can open your account online in less than 10 minutes. We break down the steps for you here:

- IRA Rollover -

An IRA Rollover is when retirement funds are moved from a firm or out of an employer-sponsored plan (such as a 401(k) or a 403(b)) to a new type of plan or administrator. In a rollover, a distribution is requested to fund your account.

For more detailed instructions on how to roll over your funds, click here.

What’s the difference between a cash transfer/rollover and an in-kind transfer/rollover?

A cash transfer or rollover means that an IRA holder is moving cash from one custodian to another custodian. An in-kind transfer or rollover is moving any other assets under an IRA that is not cash from one custodian to another. Cash transfers or rollovers are quicker than in-kind since the cash is already available which will provide a faster funding time. However, submitting a cash transfer or rollover request while assets are still being liquidated can throw a wrench in the works. If the delivering custodian receives the transfer request before all of the requested cash is available, they will usually reject the transfer, leading to a delay. If that happens, we notify the client. The client lets us know when the cash is available, and we resend the request when the cash is available.

An in-kind transfer is when an IRA holder is moving an asset (e.g. a real estate property) from the custody of one IRA custodian to another IRA custodian. The property is not sold but instead, retitled from one custodian to another. For an in-kind rollover, a house is distributed based on its fair market value at the time of the distribution. If the IRA holder decides to roll the house back to an IRA within 60 days, the house would need to be retitled back to the IRA at the receiving custodian.

There are the same property rules that one needs to be aware of. The same property must be transferred from one custodian to another. The same as a rollover, if someone distributed a house and sold the house once its outside the IRA. The proceeds from the sale cannot be rolled over since it’s not the same property that was initially distributed.

Please note: In-kind transactions take longer than cash transactions as there are more moving parts and documents involved. We will work with your current custodian to transfer/rollover your asset(s) but based on the asset(s). Some assets require more time due to additional paperwork requirements. We work closely with the custodian (sender) often for in-kind transfers. These are sometimes documents from a third party which the client may need to do some legwork to get, particularly for real estate.

6. Managing Your Account

Now that you've invested, you need to make sure that you keep up with your investments and understand the do's and don’ts of self-directed IRAs, as there are rules which apply to you as an account holder. Let’s take a look at some of the most important ways to manage your self-directed account: