Should I start a Self-Directed IRA?

[Chris Elliott]

I'll set the context of my question: I am 27 yr old self-employed individual with no IRA or 401K currently in place.

I've heard self-directed IRA's explained and I can definitely see the benefit to someone who already has money in retirement account that isn't getting much of a return, and would like to tap into the money.

My question is should someone that does not have money set up in any type of retirement put that money is a self direct IRA? My tax accountant has showed me the tax advantages. Is it just a better alternative to a traditional IRA or should everyone have one?

[Dmitriy Fomichenko]

@Chris Elliott

It will be more beneficial for you to setup a self-directed Solo 401k, look into this vehicle instead. There is a two-fold qualification criteria that one must meet in order to set-up this plan: 1) have presence of self-employment activity or own a small-business & 2) absence of full time employees working for you. 

One of the main advantages of this plan that you can take advantage of is it's high contributions limits (up to $53,000 compared to $5,500 for a Traditional IRA). Since you don't have another account to rollover this will be huge for you. In one year you can contribute sufficient amount to begin investing (that would not be possible with an IRA because of the low contribution limit).

There are number of other benefits that you can take advantage of, I'm not going to repeat them here but you can check out my blog post here on BP:

www.biggerpockets.com/blogs/2810/blog_posts/21298-...

Hope this helps!