Precious metals are a popular investment option due to their security. When the stock market crashes, the price of precious metals tends to soar. But the industry is also rife with scammers and dishonest salesmen. It's important to find a precious metals dealer that will give you an honest option.
IRA Financial Group is a common choice by people who want to create a self-directed IRA. Unlike many gold IRA providers, they don't just specialize in precious metals. So what exactly do they offer? And are they actually legitimate?
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About IRA Financial Group
IRA Financial Group has been in the business of self-directed IRAs since 2010. It was created by a group of tax lawyers who wanted to make self-directed IRAs more accessible to the public. While they're not the biggest firm in terms of staffing, they are one of the largest in the US in terms of assets managed.
In fact, almost $5 billion in customer retirement funds are managed by the company. The main investment offerings are real estate and precious metals. Both of these can be held in a self-directed IRA as long as they comply with IRS regulations, but they can't be held in a traditional IRA.
The company states that their mission is to help connect people to investments. They allow individuals to create more diverse retirement accounts, even if those individuals don't come from a strong finance background.
Precious metals and real estate might be their main focuses, but they aren't the only investment options offered. You can also invest in private business stocks, cryptocurrency, and other alternative assets not eligible for a traditional IRA.
One of their most popular services is the checkbook IRA. Basically, they will create a limited liability corporation and enter it into your IRA. This corporation will have a checkbook. You can then use the checkbook to purchase assets for the "corporation," which can then be stored in your IRA.
Self-Directed Account Options
Rather than working with a range of entities, this company focuses on working with individual investors. There are three types of solution available. The standard self-directed IRA is great for any investor. The solo 401(k) plan works well for those who are self-employed. And the ROBS solution is tailored to those who want to start their own business.
Self-Directed IRA
The self-directed IRA is the most popular account opened with the company. This type of account can hold alternative assets that aren't eligible for traditional accounts. However, your assets do need to comply with IRS regulations. Since IRA Financial Group is run by a group of tax lawyers, they help with compliance.
A self-directed IRA does not have an investment manager like traditional IRAs do. Instead, you have full control over exactly what you put in the account. The assets and diversification are both up to you.
There are two options for your self-directed IRA.
The first is a standard setup. IRA Financial Group will act as your custodian. When you want to purchase assets for the account, you will need to have the custodian facilitate the transaction. This is significantly less expensive than the second option.
The second option is for a checkbook IRA. This involves complicated tax paperwork to create an LLC that is held inside the account itself. The LLC comes with a checkbook. You can use that checkbook to purchase assets directly without needing to go through the custodian.
While it is legal, this type of IRA might be vulnerable to compliance issues if you aren't careful about what you buy. It also costs significantly more to set up, since there's a lot more paperwork to be done.
Solo 401(k)
Many self-employed people aren't aware of just how many retirement options are available to them. One option is a solo 401(k). This account lets you get the maximum tax deductions while still investing in alternative assets. In addition, since you're the trustee for this account, you can make investment choices without going through your custodian.
With a solo 401(k), you can contribute a maximum of $61,000 per year. When you reach the age of 50, that maximum increases to $67,500. You can borrow thousands of dollars from the account when need be, invest in assets like real estate, and administer the account with ease.
In addition, IRA Financial Group doesn't charge any transaction fees. You just pay the flat fee to have your account opened and maintained. There aren't any valuation-based fees or minimum requirements for your balance, either.
ROBS
The company's ROBS option exists for people who want to create a new business using their retirement funds. You can also invest in a currently operating business.
The first step is to create a C Corporation in whatever state you'll be running the business. For tax purposes, you have to create a C Corporation rather than a different type of business.
This corporation will then take on a 401(k) prototype. This allows people who participate in the plan to direct where their investments go. That includes employer securities and employer stocks.
From here, you will use this 401(k). You'll take the funds from your existing 401(k) and move them into your new 401(k) plan. Then you'll purchase stock in this new C Corporation for the normal market value.
With the profits from selling the stock, this new company will buy business assets. You can also use the revenue to pay yourself a salary.
This is one of the most straightforward ways to use your existing retirement funds to create a business without being penalized for taking distributions early. It will appeal especially to people who have a solid startup idea and a 401(k) that's large enough to cover the operating costs.
IRA Financial Group Pricing
IRA Financial Group has transparent pricing structures for each of their offerings. The exact price you'll pay may vary depending on the type of account, the assets you invest in, and other factors. One thing to note is that in comparison to other self-directed IRA custodians, IRA Financial Group has significantly fewer fees.
There is also a promotion running for people who invest in any account other than a regular self-directed IRA. When you pay with a credit card, you'll get a $200 discount on the price. If you choose to open a regular IRA, you'll get a $50 discount instead. This is because non-standard accounts are significantly pricier.
IRA custodians are notorious for taking enormous fees for transactions and accrued assets. But no matter what type of account you open with IRA Financial Group, you will never have any:
You can also create an account with IRA Financial Group completely for free to explore more of their resources. You don't have to pay anything until you decide to actually fund your plan.
With the checkbook IRA, there is a setup fee of about $1,000. Then you'll pay $360 per year in annual maintenance. That might seem steep, but you're paying for the freedom of checkbook purchases. In addition, since there aren't transaction fees, you have a solid sense of what you'll pay each year.
You can choose whether to pay your checkbook IRA annual fee on a monthly, quarterly, or annual basis.
With the normal self-directed IRA, you don't need to pay an initial setup fee. You just have to pay $360 per year. Again, this can be billed on a monthly, quarterly, or annual basis. Transactions for this account must be approved by the custodian, but the tax experts take care of all the paperwork for you.
The initial setup fee for the checkbook IRA is because of how much extra paperwork it takes. A tax lawyer has to create an LLC inside your IRA and make sure that everything is tax-compliant. That's time consuming.
The solo 401(k) also has a setup fee of about $1,000. This makes sense, since you're getting the same amount of checkbook control that you do with an LLC IRA. However, the annual maintenance fee is lower than an IRA counterpart at just $200 annually. This appears to be billed yearly rather than having a quarterly or monthly option.
The ROBS account is by far the most expensive to set up. That's because it is an extremely elaborate and time-consuming way of using your retirement funds to fund a startup without incurring fees. You'll have to pay $2,500 for the setup. Then there's a monthly fee of $100, which comes out to a whopping $1,200 annually.
For this reason, a ROBS account should only be considered by someone who has done a lot of work to plan their startup. Make sure you have a thorough business plan first.
Is IRA Financial Group a Scam?
IRA Financial Group is not a scam. They have been in business for more than twelve years, and they are operated by tax experts. If you've ever wanted a tax attorney to create the perfect alternative retirement plan for you, you don't have to look any further.
Not only is this company legitimate, but they also have excellent consumer reviews. They have been accredited with the Better Business Bureau and hold an A+ rating. Of the 10 customer reviews available on the BBB website, there's an average rating of 4.6 out of 5 stars. That indicates that nearly everybody had an overwhelmingly positive experience.
IRA Financial Group uses tax expertise to offer special retirement account setups that aren't available elsewhere. But they have also taken steps to have an advantage over their competitors.
Most IRA custodians have fee structures that charge you for things like transactions and reports. They also tend to charge you a percentage of your holdings. But IRA Financial Group doesn't have any percentage-based or extraneous fees. All you have to worry about are the startup and flat maintenance fees.
One flat yearly fee allows you to add any IRS-approved alternative asset to your account. Depending on how much real estate and precious metals you invest in, this could end up the cheapest fee on the market. Just keep in mind that if you're exclusively buying precious metals, there are companies with lower overall maintenance fees.
Pros & Cons of IRA Financial Group
Pros
Cons
Final Thoughts
When it comes to self-directed retirement solutions, IRA Financial Group is one of the best in the business. Rather than serving financial institutions, they focus exclusively on individuals. They have created plans that allow investors control over their retirement, access to self-directed 401(k)s, and even the ability to fund a business using their retirement savings.
IRA Financial Group was created by expert tax lawyers, and it shows. They are able to complete complicated tax paperwork to help you take advantage of your retirement options. In the past, these types of services were only available to extremely high net worth investors.
The company also has largely positive customer reviews and ratings. Thanks to their flat and transparent pricing structure, you always know exactly what you'll be paying.
Overall, we do recommend this company if you want a self-directed retirement account set up by tax professionals. You'll be able to invest in a wide variety of different alternative assets, including real estate and precious metals.
However, their annual maintenance fees can be expensive in comparison to precious metals IRA custodians. That's because your account can hold much more than just precious metals. If you want to diversify into cryptocurrency or real estate, that won't matter. But if you're only interested in precious metals, you can probably get a lower price elsewhere.
Similarly, this company is not a precious metals dealer. If you're interested in purchasing bullion for a personal portfolio, you'll want to look for a proper dealership. IRA Financial Group exclusively offers services related to retirement accounts.
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