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Think Outside the Stock Market: 4 Alternative Ways to Invest Your IRA

When planning for retirement, most people turn to the stock market as an effective long-term investment. But while stocks may be the most common tools for building a retirement portfolio, they’re not the only options—nor are they always the most effective. In fact, the closer you get to retirement, the more vulnerable you become to fluctuations in the stock market. Another big recession, for example, could cause even the most solid portfolio to take a dive.

alternative stock market ira investments

What many people don’t realize is that you have several alternative retirement investing opportunities at your fingertips. While they each have their benefits and disadvantages, including them in a Self-Directed IRA can help build your retirement savings while offering protection against the stock market’s volatility. Below, we address the pros and cons of a few of the lesser-known investment options.

Real Estate

Real estate opens a variety of possibilities for growing your IRA and is an increasingly common option for alternative retirement investing. Owning rental property, whether residential, commercial or agricultural, provides a steadily increasing income stream; as many as 19 percent of retirees receive some income from rental properties. Flipping properties on either a wholesale or fix/flip basis offers another avenue for profit. Finally, you can purchase property to resell through a lease/option or contract for deed. While each of these models presents its own unique market considerations and tax implications, all are possible within a Self-Directed IRA.


  • Solid asset
  • Above-average to stellar returns, depending on the opportunity
  • Reliable cash flow
  • Potential for appreciation


  • High capital requirements
  • Can be illiquid at times
  • Potential for transactional and tax complexity

Private Lending & Trust Deeds

Diversifying one’s portfolio through private lending has become one of the most popular alternative retirement investments allowed within a Self-Directed IRA. By investing in trust deeds, you can earn passive income from interest while securing your investment with a deed of trust on the property. There are plenty of options for private lending, from mortgage loans to business expansion loans. You can also lend money to other private investors or provide smaller personal loans for purposes such as home improvement or debt consolidation.


  • Lower capital requirements than real estate ownership
  • Simple asset without the hassles of tenants, repairs, etc.
  • If the borrower defaults, your IRA can foreclose on the property


  • Need to understand lending laws in your area
  • More liquid than real estate ownership, but still relatively illiquid

Tax Liens & Deeds

tax liens for ROI in IRA

Tax liens are often overlooked as an alternative retirement investing option. When a landowner owner fails to pay property taxes, the government places a legal claim on the property for the amount owed. You can use your Self-Directed IRA to purchase these liens on residential, commercial or undeveloped properties, which the property owner must then repay with interest. Approximately $6 billion in liens are auctioned off to investors each year.


  • Potential for high rate of return
  • If the property owner fails to pay the property taxes on time, your IRA can foreclose on the property
  • Poses a lower risk than many other types of investments
  • Has moderate liquidity
  • Low maintenance investment


  • Provides no monthly cash flow, as liens are paid off in a lump sum
  • Requires knowledge of the property in question
  • Infrequency of auctions can limit access to opportunities

Venture Capital

You can use your Self-Directed IRA to help startup companies get off the ground. Small businesses that have long-term growth potential but have not yet proven their profitability typically rely on investors for seed money. In return, the investor receives shares of the company’s private stock. You can invest your money individually as an angel investor or participate in a venture capital fund.


  • Potential for large capital gains


  • Poses a relatively high risk
  • Illiquid, relying on long-term growth for gains
  • Relatively complex investment
  • Potential exposure to UBTI taxation

With so many alternative retirement investing opportunities available, there’s no need to rely upon the stock market for your savings. Safeguard Advisors can help you navigate the rules and complexities and choose the most effective options for diversifying your retirement portfolio.


Photo by Perpetual Tourist via CC license

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