How to Watch Your Fees with a Self-Directed IRA

Posted on November 9, 2016 by

Maximizing the return you get out of your retirement investments is a question that’s on most peoples’ minds. So how can a Self-Directed IRA help?

One word: fees. Fees are important for any investor to pay attention to—keeping them at a minimum will allow you to have more cumulative growth over the years, and avoiding major fees will ensure that you cut your direct expenses as much as possible.

In the world of real estate investing, fees can be very difficult to deal with. Here are some steps to ensure that you can maximize the value of your account no matter how much money you currently invest with: 

Understanding Fees with Your Self-Directed IRA

Investing in real estate with an IRA is a great way to ensure maximum protection for your assets. But using a Self-Directed IRA doesn’t guarantee that you’re protected from a lack of knowledge.

You’ll have to pay attention to the fees you’re paying your Self-Directed IRA custodian, just as you would pay attention to the fees you pay when acquiring real estate.

Financial reforms generated in response to the 2008 and 2009 financial situation have resulted in tighter regulations that require Wall Street to implement more transparency in fees. Why should your Self-Directed IRA be any different? The fees you are charged should be fair and easy to understand.

Fee Schedules: Why Understanding These Can Maximize Your Investments

Some Self-Directed IRA custodians will charge fees on a per-asset basis. Or they might charge it based on the account value. This means that the more you acquire, the more you’re going to pay in fees. The more success you have, the more you’re going to end up shelling out to custodians. Isn’t this precisely how the IRS works? The more you earn the more you pay.

Example of Annual Fee Charges based on the Value of Your Account:

Account Value $60,000-$89,999.99 is $450 per Year

Account Value $125,000-$249.999.99 is $650 per Year

Example of $295 Per Asset Annual Fee Charges:

1 Asset:  $295

2 Assets:   $590

3 Assets:  $885

Is there a better way of doing it? There is an alternative. American IRA, for instance, utilizes a unique fee schedule, charging a flat annual fee of $285 per year regardless of the value of the account and regardless as to how many assets are in your account. This means that as your account grows in value, you still won’t have to pay more simply because you own more.

This fee structure is more intuitive because it allows people who are active investors with their Self-Directed IRA to keep doing what they’re doing without worrying about added expenses paid to the custodians. The end result is less worry, more control, and a bigger account should you continue to grow it.

What Kinds of Fees are You Paying?

It’s not always about the amount of fees, but how fees are structured. You may pay very little fees in a Self-Directed IRA because you don’t have much value in the account. But as your money grows, your custodian fees may expand too.

That’s why you have to know your fee structure. If you’re interested in learning more about Self-Directed IRAs and how you can utilize them in order to maximize -the value of your retirement investments, be sure to visit or give us a call at 866-7500-IRA.

Jim HittJim Hitt is the Chief Executive Officer of American IRA and he has been committed to all aspects of investing for more than 30 years, using self-directed IRAs for his own investments since 1982. Jim’s forte is the financing and acquisition of real estate, private offerings, mortgage lending, business’s, joint ventures, partnerships and limited liability companies using creative techniques.

Contact Jim Hitt

Jim Hitt’s Other Articles >>


Leave a Reply