What is a Self-Directed IRA (SDIRA)?
A Self-Directed IRA is an Individual Retirement Account that lets you hold a wider range of assets — real estate, private equity, cryptocurrency, precious metals, promissory notes — alongside the traditional stocks and bonds you'd find at a conventional brokerage.
Steps / Explanation
A Self-Directed IRA (SDIRA) is a type of Individual Retirement Account that allows the account holder to invest in a broader range of assets beyond traditional stocks, bonds, and mutual funds — including real estate, private equity, cryptocurrency, precious metals, and promissory notes. The IRA holder directs all investment decisions; the custodian (Digital Trust, for Retired.com accounts) holds the assets and handles administrative and reporting obligations but does not advise on or evaluate investments.
The "self-directed" part is the key distinction. At a conventional brokerage, you choose investments from a menu the brokerage maintains. With an SDIRA, you choose the investment, the custodian holds it on behalf of your IRA, and the tax treatment of the account stays the same as any other IRA of that type.
What's the same, what's different
The Internal Revenue Service (IRS) does not maintain a separate "Self-Directed IRA" category. An SDIRA is a Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, or Solo 401(k) — held with a custodian who allows alternative assets.
What's the same. Contribution limits, eligibility rules, tax treatment, distribution rules, Required Minimum Distributions (RMDs) — all identical to any other IRA of the same type. A Traditional SDIRA at Retired.com follows the same rules as a Traditional IRA at a major brokerage.
What's different. The range of assets you can hold inside the account, and the operational model around how investments are made and recorded. With an SDIRA, the account holder is the decision-maker on every investment.
What you can hold inside an SDIRA
The IRS prohibits two specific asset classes in any IRA: collectibles (art, antiques, most coins, alcohol, gems) and life insurance contracts. Almost everything else is permitted, subject to the rules described in "Investment restrictions in an IRA".
Common SDIRA asset categories include real estate, private equity and private placements, promissory notes, precious metals (held in IRS-approved storage), cryptocurrency, and LLC interests. Conventional public-market assets — stocks, bonds, mutual funds, exchange-traded funds — are also permitted in an SDIRA.
Who is involved
Three roles to understand:
You, the account holder. You direct every investment decision and are responsible for ensuring those decisions comply with IRS rules.
The custodian. Digital Trust holds the assets, processes transactions, files required IRS reports, and maintains the records the IRS requires. Digital Trust does not advise on or evaluate investments. Retired.com is the platform that coordinates with Digital Trust — where you apply, submit requests, and manage your account day to day. See "How Retired.com works — the platform and custodian model explained" for the operating model in detail.
Your tax advisor or attorney. SDIRA rules — particularly around prohibited transactions and disqualified persons — can be unforgiving. We recommend consulting a tax advisor or attorney for guidance specific to your situation.
Why people use an SDIRA
Account holders typically open an SDIRA when they want to invest retirement funds in something a conventional brokerage doesn't offer. Common reasons include holding rental real estate inside an IRA, investing in a private business or fund, lending money through promissory notes, or building a diversified position in cryptocurrency within a tax-advantaged account. Whether an SDIRA is the right structure for any particular goal is a decision for you and your tax advisor or attorney.
Common questions
Is a Self-Directed IRA a different type of account from a Traditional or Roth IRA?
No. An SDIRA is a Traditional, Roth, SEP, SIMPLE, or Solo 401(k) account held with a custodian who allows alternative assets. The IRS rules for each account type — eligibility, contribution limits, distributions, RMDs — are identical regardless of whether the account is "self-directed."
Does Retired.com tell me what to invest in?
No. Retired.com is the platform; Digital Trust is the custodian for Retired.com accounts. Custodians hold and administer assets but do not provide investment advice or evaluate investment opportunities. Investment decisions are yours.
Are there investments I cannot hold in a Self-Directed IRA?
Yes. The IRS prohibits collectibles and life insurance contracts in any IRA, and certain transactions between an IRA and a "disqualified person" are prohibited regardless of the asset. See "Investment restrictions in an IRA" for the asset-side rules.
Can I hold both stocks and alternative assets in the same SDIRA?
Yes. An SDIRA can hold conventional public-market assets and alternative assets in the same account.
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Retired.com is a platform that connects clients with its affiliated entities, including Digital Trust, BitcoinIRA, WAO Advisory, Rocket Dollar Capital, and Rocket Dollar Advisor. Digital Trust is an independent, directed, non-discretionary trust company that is registered and regulated in the state of Nevada. While Retired.com facilitates connections to these services, it is not itself a custodian, digital wallet, exchange, broker-dealer, registered investment advisor, or a company involved in trading publicly traded assets. All information provided is for educational purposes only and should not be taken as investment, legal, or tax advice. We encourage you to consult with a qualified advisor or professional to determine the most suitable options for your individual needs.