Self-Directed IRA
Definition
A self-directed IRA is an individual retirement account that can hold alternative assets, including physical precious metals, real estate, and private holdings. It works through a custodian who administers the account and follows IRS rules.
A self-directed IRA widens what a retirement account can own beyond stocks and funds.
Why it matters
A standard IRA at a brokerage usually limits you to stocks, bonds, and funds. A self-directed IRA opens the door to alternatives such as physical gold and silver. That flexibility comes with added responsibility, since the account holder chooses the assets within IRS limits.
In practice
You open the account with a custodian that supports alternative assets, fund it, and direct the purchase of approved metals. The metal is then stored at an approved depository, not at home. The custodian handles recordkeeping, reporting, and transactions on your instruction.
Common confusion
Self-directed does not mean unrestricted. The same contribution limits, distribution rules, and prohibited-transaction rules apply, and only eligible metals qualify. It also is not a place to store coins personally; holding the metal yourself can disqualify the account.