The most popular self-directed retirement account investments include: Rental real estate; Secured loans to others for real estate (trust deed lending); Private small business stock or LLC interest; and Precious metals, such as gold or silver.
Under current law, a retirement account is only restricted from investing in the following:
- Collectibles such as: Art, stamps, coins, alcoholic beverages, or antiques (IRC 408(m));
- Life insurance (IRC 408(a)(3));
- S-corporation stock, (IRS Letter Ruling 199929029, April 27, 1999, IRC § 1361 (b)(1)(B));
And, any investment that constitutes a prohibited transaction pursuant to ERISA and/or IRC 4975 (e.g. purchase of any investment from a disqualified person such as a close family member to the retirement account owner).
The most popular self-directed retirement account investments include:
- Rental real estate;
- Secured loans to others for real estate (trust deed lending);
- Private small business stock or LLC interest; and
- Precious metals, such as gold or silver.
These investments are all allowed by law and can be great assets for investors with experience in these areas.
Additional Resources:
Directed IRA Podcast #2 - Investment Options with a Self-Directed IRA and 401k