Self-Directed IRAs (SDIRAs) open the door to a wide range of investments, which unfortunately also makes them a target for fraud. This article covers the patterns scammers commonly use and how to recognize them before you direct any funds.
Steps / Explanation
Why SDIRA holders are targeted
Because an SDIRA can hold real estate, private equity, promissory notes, cryptocurrency, and other alternative assets, scammers sometimes pitch fraudulent opportunities specifically as "IRA-eligible" investments — counting on the SDIRA structure to sound more official or exclusive than it is. Being IRS-eligible for IRA investment never means an opportunity has been vetted, approved, or endorsed by Retired.com or Digital Trust, our custodian. Eligibility and legitimacy are two separate questions.
Common scam patterns
Guaranteed or unusually high returns. Legitimate investments carry risk, and no one can guarantee a specific return. Promises of "guaranteed 15% annual returns" or "zero risk" are one of the most reliable signs of fraud.
Unregistered promoters or securities. Ask whether the person or the investment is registered with the SEC or a state securities regulator. Unregistered promoters are far more likely to be operating a fraudulent scheme.
"IRA loophole" pitches. Be skeptical of pitches that frame an investment as a special trick or loophole only available through a Self-Directed IRA. The SDIRA structure is simply a way to hold a broader range of assets — it doesn't create special access to secret opportunities.
Pressure and urgency. Scammers create artificial deadlines ("this offer expires today") to prevent you from taking time to do due diligence or consult an advisor.
Requests to move money outside the normal process. Any request to wire funds directly to an individual, or to bypass Digital Trust's custodial process, is a major warning sign. Legitimate investments in an SDIRA are funded through the standard account process — see "Your recordkeeping responsibilities as an SDIRA holder" for how documentation should flow.
Self-dealing disguised as an investment. Some scams involve an offer to invest in something connected to you or a family member. This can also create a prohibited transaction — see "Prohibited transactions — what they are and why they matter" and "Disqualified persons — who counts and why" for how those rules work.
Fake or impersonated custodians. Scammers sometimes impersonate a custodian or platform to make a fraudulent request look official. Retired.com and Digital Trust will only ever contact you through channels you've verified — if you're unsure whether a communication is genuine, contact the Service Team directly using contact information you already have, not a number or link provided in the suspicious message.
What Retired.com and Digital Trust will never do
Neither Retired.com nor Digital Trust will ever ask you for your password or a two-factor authentication (2FA) code, ask you to move funds outside the standard account process, or guarantee the performance of any investment. If you receive a request like this claiming to be from us, treat it as fraudulent and contact the Service Team to confirm.
If you think you've encountered a scam
Don't submit funds or sign anything until you've had time to verify the opportunity independently. Contact the Service Team right away with your concerns — they can help you understand the standard account process and flag anything that looks unusual. We recommend consulting a tax advisor or attorney for guidance specific to your situation, particularly before committing IRA funds to an unfamiliar investment.
Common questions
Does Retired.com vet or approve the investments I direct my IRA into?
No. Retired.com is the platform and Digital Trust is the custodian; neither evaluates, advises on, or vouches for the suitability of any investment. That evaluation is your responsibility, ideally with the support of independent professionals.
If a promoter says an investment is "IRA-approved," does that mean it's legitimate?
Not by itself. "IRA-eligible" only describes the type of asset — it says nothing about whether the specific opportunity or the person offering it is trustworthy. See "Red flags in investment opportunities" for a fuller checklist to evaluate any specific opportunity.
I already sent money based on what I now think was a scam. What should I do?
Contact the Service Team immediately and consider reporting the incident to the FTC, the SEC, or your state securities regulator. Acting quickly can sometimes limit further loss.
Need more support? Contact our Service team
Select "Start a Conversation" from the Chat menu or call us at 1-800-RETIRED