Directed IRA is a self-directed retirement account provider operating under the trade name of Directed Trust Company. It enables investors to hold alternative assets such as real estate, private funds, promissory notes, cryptocurrency, and eligible precious metals.
It may suit someone who understands an alternative investment and needs custody and transaction administration. It does not replace investment selection, independent due diligence, or personalized tax advice.
For readers evaluating Directed IRA, the key questions are whether it can administer their proposed investment, what the complete account will cost, and whether the investment fits their retirement needs.
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What Is Directed IRA?
Directed IRA’s company history says it launched in 2018 under Directed Trust Company and was founded by Mat Sorensen and Mark J. Kohler. Its educational resources include articles, webinars, a podcast, and The Self-Directed IRA Handbook.
A self-directed IRA follows the rules of its underlying account type, such as a traditional or Roth IRA. “Self-directed” refers to broader investment choices and investor direction; it does not create a separate tax category.
Using an IRA to purchase a private investment changes the ownership and administration of that investment. The account holds the asset, and the investor must respect the boundaries between retirement assets and personal property.
Directed IRA and Directed Trust Company
Directed IRA identifies itself as a trade name of Directed Trust Company. Its disclosures say the company acts as a directed custodian, does not sell investments or provide investment, legal, or tax advice, and does not conduct due diligence on prospective investments or their providers.
The founders’ professional backgrounds and the company’s educational content can help readers understand self-direction. They do not mean that opening an account establishes a personal attorney-client relationship or a personalized advisory engagement.
Before signing, review the custody agreement, cash arrangements, investment responsibilities, fee schedule, and transfer provisions.
Directed IRA Investment Options
Directed IRA lists real estate, IRA-owned LLCs, private funds, notes, venture investments, precious metals, and cryptocurrency. It also describes access to publicly traded investments through applicable arrangements. Confirm the specific transaction and required documents before funding it.
Real Estate
Evaluate property condition, title, insurance, demand, management costs, maintenance, and the likely selling market.
Build a budget that includes vacancies and unexpected repairs. A property can be profitable on paper while leaving the IRA short of cash.
Confirm ownership wording before signing purchase documents and establish how income and expenses will be handled.
Promissory Notes and Private Lending
Review borrower finances, collateral, lien priority, repayment terms, and default remedies.
A high interest rate may reflect substantial risk. Even collateralized lending can produce delayed payments, enforcement expenses, or losses.
Ask who will service the loan and manage collections if the borrower stops paying.
Private Funds and Syndications
Examine sponsor experience, fees, leverage, financial disclosures, conflicts, and investor rights.
Distinguish projected returns from enforceable payment obligations. Understand withdrawal restrictions, possible extensions, and additional capital requirements.
A private asset’s reported value may change infrequently even when its economic risk changes substantially.
Venture Capital and Startups
Assess dilution, financing needs, shareholder rights, and the possible path to an exit.
Consider whether the account can tolerate a complete loss and years without distributions. A compelling business story should be supported by financial and legal analysis.
Cryptocurrency
Determine who controls custody and access, how trading works, and what happens if a platform becomes unavailable.
Directed IRA publishes a separate crypto fee schedule. Do not assume the general IRA pricing applies to a cryptocurrency account.
Compare total trading, custody, and platform expenses using the expected trading frequency.
Directed IRA Fees: What Does It Cost?
Directed IRA’s general pricing page advertises a $50 account establishment fee, a $495 annual account fee covering up to three alternative holdings, and a $50 standard asset-processing fee.
The full schedule includes additional charges: $100 annually for each qualifying holding beyond three, $150 for direct real estate processing, $35 for a domestic outgoing wire, $300 annually for optional VIP membership, and $200 for account termination. Certain holdings are excluded when calculating additional asset charges.
The full 2026 fee schedule also applies higher annual account fees to larger balances. Accounts valued from $2 million to $4,999,999 incur a $795 annual fee, while accounts from $5 million to $9,999,999 incur a $1,595 annual fee.
For accounts valued at $10 million or more, the annual fee is $1,595 plus 0.03% of the amount exceeding $10 million. Investors should confirm the fee schedule and exclusions applicable to their account before estimating total costs.
Illustrative First-Year Costs
A standard account with one private investment produces a $595 subtotal: $50 establishment, $495 annual administration, and $50 processing.
A directly owned property produces a $695 subtotal before wire and other charges: $50 establishment, $495 annual administration, and $150 processing.
These examples exclude investment expenses, professional services, later activity, and special account arrangements.
Assess Costs Relative to Account Size
For illustration, a $495 annual fee equals 4.95% of a $10,000 account, 0.495% of a $100,000 account, and 0.099% of a $500,000 account.
These calculations cover only the annual fee. They show why fixed charges can weigh heavily on smaller balances.
Request an estimate covering opening, normal activity, holding costs, distributions, and eventual exit.
Can Directed IRA Be Used for a Gold IRA?
Directed IRA offers administration for qualifying gold, silver, platinum, and palladium investments. Its metals page describes coordinating purchases with a dealer and arranging compliant storage.
A Gold IRA generally refers to a self-directed IRA holding eligible physical gold. It retains the tax treatment of its underlying account.
Eligible Products
Directed IRA lists minimum bullion purity levels of 99.5% for gold, 99.9% for silver, and 99.95% for platinum and palladium. Certain statutorily permitted coins, including American Gold Eagles, have separate eligibility exceptions. Confirm the exact product before purchase.
Ownership and Storage
The IRA owns the metal. The investor directs decisions but cannot treat IRA bullion as personal property.
IRS rules provide exceptions to collectible restrictions for specified coins and qualifying bullion, with trustee-possession requirements for bullion. Home storage should not be treated as an ordinary compliant IRA custody arrangement.
Total Precious Metals Costs
Compare administration, dealer premiums, storage, insurance, shipping, and selling spreads.
Request written buyback terms. A dealer’s policy does not guarantee a future price or an immediate buyer.
Someone seeking only gold-price exposure may also compare physical bullion with eligible exchange-traded investments, considering liquidity, expenses, and the importance of physical ownership.
How to Open and Fund a Directed IRA Account
Directed IRA provides account opening, funding, and investment workflows. Its funding page distinguishes contributions, transfers, and rollovers.
1. Confirm Investment Compatibility
Describe the asset, ownership structure, financing, parties, and proposed timeline.
Establish that the custodian can administer the transaction before transferring funds.
2. Select the Account and Review Documents
Choose the account around eligibility, taxes, time horizon, and distribution needs.
Review the custody agreement and fee schedule, including investment responsibility, cash handling, valuations, and termination.
3. Arrange the Correct Funding Method
An IRA transfer differs from an employer-plan rollover. An indirect rollover adds timing and other restrictions that require careful review.
Have both providers confirm instructions before authorizing movement. Moving pretax money into a Roth arrangement may involve a taxable conversion.
4. Submit Investment Instructions
Directed IRA’s investment workflow asks clients to log in, complete and electronically sign investment forms, and submit the transaction for processing.
Administrative processing should not be interpreted as approval of investment quality.
5. Maintain Records and Liquidity
Monitor statements, payments, expenses, valuations, and distributions.
Plan cash reserves before investing. Ongoing account administration may become difficult if all funds are locked in one illiquid asset.
What Is a Directed IRA Checkbook IRA LLC?
Directed IRA describes an IRA-owned LLC structure that permits transactions through the LLC’s bank account. This is commonly called checkbook control. It can give the investor more direct payment responsibility, while adding entity documents, banking, bookkeeping, and possible state filing obligations.
Compare those costs with the administrative benefit. Have the structure reviewed before forming the entity.
Checkbook control does not exempt transactions from IRA rules or permit personal use of retirement funds.
View the Best Gold IRA Companies in the USKey IRS Rules and Investment Risks
Prohibited Transactions
IRS rules restrict improper use of an IRA by its owner, beneficiary, or a disqualified person. Examples include borrowing from the account, selling property to it, or buying property for personal use.
Disqualified persons include specified family members and fiduciaries. If an owner or beneficiary engages in a prohibited transaction, the account can cease to qualify as an IRA from the first day of that year, triggering a deemed distribution and potentially substantial taxes. A market-rate price does not automatically make a related-party transaction acceptable.
UBIT and Debt-Financed Income
Certain operating-business income and income attributable to debt-financed property can generate unrelated business income tax obligations. IRS Publication 598 explains the framework. Obtain tax advice before investing in a leveraged partnership, operating business, or debt-financed asset. Identify who will prepare any special returns and how the account will pay the tax.
Liquidity and Valuation
The SEC’s self-directed IRA guidance highlights limited disclosures and liquidity risks in alternative investments. These can complicate selling assets and meeting retirement distributions.
A statement value is not necessarily a price available from a buyer. Plan around realistic exit terms.
Fraud and Due Diligence
The SEC also cautions that self-directed custodians generally do not validate investment quality or verify promoters’ claims.
Investigate the investment separately from the provider. Review contracts, financial information, ownership, collateral, promoter background, and the use of funds.
Is Directed IRA Safe?
Directed Trust Company’s disclosures say alternative investments are not FDIC insured or guaranteed and can lose principal. The company itself is not an FDIC-insured institution; certain uninvested cash arrangements may qualify for pass-through deposit insurance when conditions are met.
Ask where cash is held and how coverage applies to the account. Custody and transaction administration cannot eliminate borrower defaults, property losses, sponsor misconduct, or market volatility.
Directed IRA vs. a Conventional Brokerage IRA
Directed IRA provides access to supported alternative assets, while a conventional brokerage IRA primarily holds marketable investments such as stocks, bonds, mutual funds, and ETFs. Alternative investments typically require asset-specific documents and transaction instructions, whereas brokerage investments generally use standardized trading processes.
Liquidity also differs: selling an alternative asset depends on its market, ownership structure, and exit restrictions, while widely traded securities are usually easier to sell.
Costs and investor responsibilities are additional considerations. Directed IRA charges annual custody fees alongside applicable processing and service charges, while a conventional brokerage IRA may cost less for a basic portfolio of marketable investments.
Alternative assets also require more investor involvement in due diligence, recordkeeping, valuations, and transaction coordination. The appropriate choice depends on the intended investment, total expenses, liquidity needs, and the amount of administrative work the investor can manage.
Who May Find Directed IRA Suitable?
Directed IRA may suit an investor with a specific, well-understood alternative investment, adequate cash reserves, and the ability to handle additional responsibilities.
It may be less suitable for someone seeking investment recommendations, frequent low-cost trading, or ready access to every invested dollar. Smaller accounts may struggle to absorb fixed costs.
Evaluate concentration across the entire retirement portfolio. A single property, borrower, or startup can create substantial exposure.
Is Directed IRA Worth Considering?
Directed IRA merits consideration when an investor needs custody for a well-understood alternative asset and its service terms fit the proposed transaction.
Before proceeding, confirm the complete fee schedule, investigate the investment independently, review the ownership structure, and plan for cash requirements and eventual distributions. The decision should support the investor’s broader retirement goals.
