The Perfect IRA LLC?

Anyone I have spoken with who is interested in a self-directed IRA or 401(k), the question invariably comes up:  do you qualify and are you eligible for a 401(k)?  As you might imagine, just because the 401(k) plan may be viewed as more desired, one must qualify for the plan.  I make this inquiry as a self-directed (or self-administered 401(k)) invariably should be a seriously-considered option for an individual who qualifies for this plan.  There are many reasons for this inclusive, but not limited to, the following:

  • Higher Contribution Limits;
  • Participant Loan Options;
  • Possible Reduced Administrative Fees;
  • No Custodian Mandate;
  • No UDFI applicable to real estate investments; and,
  • Ability to Invest in Traditional and Non-Traditional Investments all from ONE Account….(and this is what we are going to discuss!!)

Limitations of Housing Your IRA LLC Account at Your Local Bank

As those of you who have an IRA LLC already know, your IRA LLC account is most likely housed at your local bank.  This is “just the way it is” as many financial service companies will not open an IRA LLC account as the member of the LLC is an IRA.  As a result, the IRA account owner and LLC manager can only open the account with the path of least resistance (in most cases)…a bank  And, you probably haven’t given it much thought….I mean you want to self-direct so a bank is fine for you and you like that feeling that your money is right down the street.  While the account is sufficient for your needs, is it necessarily the best option?  Have you considered:

  • The hassle of deciding how much to rollover into your IRA account to fund the IRA LLC (I hear all the time, “I don’t really want to move more into the IRA LLC account than what I will need — I mean otherwise it is just going to be sitting earning minimal interest.”)  By the way, how true.
  • What happens when you don’t immediately find that “perfect investment” or are in-between investments? (wouldn’t you like the option of keeping your money active rather than just earning minimal interest in a money market account?)
  • The tiresome feeling of your bank charging monthly service fees for just having an account…whether your money is actively invested at the time?

BUT, what if you could:

  • Open your IRA LLC account at a large, respected financial services company vs. your local bank (more options vs. less options)
  • Continue your benefits of FDIC…and add the benefits of…SIPC insurance protection on non-invested funds (e.g., money market)
  • Have checkbook control of your IRA LLC account (just like you would at your local bank)
  • Have the freedom with your IRA LLC account to invest into stocks, bonds, mutual funds, assets like real estate OR both at the same time from this account (yes, your IRA LLC account being able to invest in traditional and non-traditional  (e.g., real estate) assets all from one account)
  • Transfer or rollover any amount of eligible funds you desire vs. an amount you think you need for your self-directed investment plans (keep in mind that if you can invest in any IRS-permitted asset, why wouldn’t you want the option of having all of your funds in one account?)
  • Keep your retirement funds active while waiting for an investment or in-between investments (remember it’s your retirement funds)
  • No establishment fees or monthly service fees (can’t have that with most bank accounts)

With the aforementioned benefits of this “new” type of IRA LLC account, one should give serious consideration to moving that ole IRA LLC bank account to this new type of account structure….and, you can do it at no cost.  Nothing else changes with the IRA LLC account or how you transact your investments, and you have so many more benefits.

Contact PGI

Have questions?  Want more information?  Just call PGI.  We have been exploring this option for some time in our attempts to create an IRA LLC platform that is more user-friendly to an IRA LLC account owner.  This type of account can be established very quickly and can replace your current IRA LLC bank account OR compliment and, be in addition to, your current bank account (if you want both).

As always, the information provided is intended to be educational in nature.  It is not intended, nor should it be interpreted as, any form of tax, legal, financial or investment advice.  PGI does not offer such guidance and one should always consult with their respective professional in all such matters.