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Like ice cream, retirement plans and pension plans come in many different flavors.  The most common are IRAs and 401(k)s.

Self Directed: Stock Market Only

Of the more than $5 trillion in retirement plans, 95% is invested into the stock, bond and mutual fund markets through large institutional brokerages or banks.

Some of the accounts offered by these firms are characterized as “self directed”, meaning that you as the investor can take action to move funds around within stocks, bonds and mutual funds only.  The custodian carries out the transaction and you pay fees.

Self Directed: Non-Traditional Custodian

Then, there’s a subset of “self-directed” IRAs whereby you can invest into non-traditional assets like real estate, private company stock, cryptocurrencies, precious metals, etc.  There are several dozen specialty firms that administer an IRA in the same fashion as the mainstream institutions, but have the ability to document the more individualized transactions that non-traditional investment assets require.

In the case of these “non-traditional” custodians, the term “self-directed” applies in the same sense it does with the stock market custodians – in that you will identify opportunities and direct the custodian to execute the transaction.  The custodian then carries out your direction by executing documents, issuing funds for the acquisition or maintenance of investments, and receiving the income produced by investments.  They handle the transactions for you and charge fees to do so.

Self Directed: Checkbook Control

Then, comes the best choice of all – checkbook control.  Safeguard Advisors sets up a legal structure (LLC) or trust (Solo 401k) that allows you to transfer control from non-traditional custodians to yourself.  (It’s your money so why shouldn’t you control it?)

We assist with the set up of a checking account at your local bank to hold the plan funds, and you then execute transactions simply by writing a check.  You entirely control the process and all but eliminate custodial paperwork, processing delays and per-transaction fees (annual fees still apply).

You can see an illustration of this by going to this link: Custodian vs Checkbook Control.

This Isn’t A New Concept

What Safeguard offers as a service has been done for high net worth clients ever since the Employee Retirement Income Security Act of 1974 (ERISA) was passed by Congress.

As a matter of fact, our tax attorney, has been setting up plans with checkbook control for more than 20 years. So, this strategy isn’t new. It’s just not been well known.

But, since the early 2000’s and the advent of high speed internet as a means to deliver knowledge-based services, the playing field has been leveled and this strategy, formally reserved for the wealthy, is now yours for the taking. Contact us today to get started.