How to convert Roth to self directed IRA

[Jaclyn Peyton]

Hello, I am a startup REI from Lake Saint Louis MO who is trying to get information on how to convert my Roth IRA into a self directed IRA. Does anyone have any recommendations on who I should talk to? Does anyone have any experience with this- good or bad? Appreciate all suggestions and insights.

[Dmitriy Fomichenko]

@Jaclyn Peyton

You have couple options: 

You can create a custodial self-directed IRA, in which case the funds and all investments are held by the custodian and you direct them what to do. The down side of this model is that there is a fee for every transaction and it takes time to execute a transaction since you don't have direct access to your funds.

The alternative to that is what's know as Checkbook IRA. With this model special purpose, single-member LLC is created, your IRA owns it and you manage it. Doing so allows you to bypass the custodian.

There is even better options, that is truly self-directed Solo 401k (this is the best of all three options if you qualify), however it is not for everyone. To qualify for it you have to be self-employed (can be part time) or own a small business. With this model you don't need an LLC, you eliminate the custodian all-together and gain total control over your retirement funds. Unfortunately Roth IRA can not be rolled over into Solo 401k, but it allows for huge contributions nearly 10 times of an IRA (up to $60K for 2017) so you can grow your account very quickly.

The subject of self-directed IRA is a frequent discussion here on the forum, you should do a quick search and will find lots of materials to keep you busy reading and learning from other discussions for days :-). Hope this is helpful.