Self-Directed IRAs: Establishing an Investment Strategy

Self-directed IRA accounts, also known as checkbook IRA accounts, provide many options for investors. If you want to maximize your retirement account returns, investing in real estate is one of the best ways to go about it.

But, for some, the more options that are presented, the more confusing it becomes. However, it shouldn’t be. Like any other investment account, all you have to do is ask yourself a series of questions to determine your real estate investment strategy.

3 Questions to Ask Yourself Before Delving into Your Self-Directed IRA Account

Investor Risk Compass: We all have an inherent risk compass, especially when it comes to money. Some of us are extremely conservative, some of us are avid risk takers and many of us fall somewhere in between. Knowing your risk compass before you begin investing your checkbook IRA funds into the real estate marketing will help you to make smarter decisions.

How many years before I have before retirement? Answering this question will help you determine how you want to go about investing your self-directed IRA account funds. Flipping properties for example is a quicker payoff than buying and holding (eg, renting out) properties.

What type of income do I want/need during retirement? Many don’t actually sit down and calculate the numbers to see how much they’re going to need overall to support a retirement lifestyle that may last 20, 25 or 30 years or more. The answer to this question will in essence tell you what can and should invest in to get the biggest and safest return on your investment.

These are just three of the questions you will need to ask and answer before settling on an investment strategy for your checkbook IRA account. Albeit, they are three of the most important.