The Self Directed Retirement Account (SDRA)
A Self Directed Retirement Account, or SDRA, is a term used to describe a defined contribution plan, or rather a retirement account which is able to be invested in any investment, both traditional and alternative investments, at the discretion of the account owner. All of these retirement accounts have preferential tax treatment for the individual. While not all retirement plans or accounts are self directed, these are examples of some that are:
- Self directed IRA
- Self directed Roth IRA
- Self directed SEP IRA
- Self directed SIMPLE IRA
- Self directed Beneficiary IRA
- Self-directed Solo 401(k) (or Solo K)
- Self-directed 401k
Although each of these account types is defined in the Internal Revenue Code (IRC) as a type of retirement account, the IRC rules applicable to each are different. It is important to note that there is no term in the Internal Revenue Code (IRC) which is defined as “self-directed”. All retirement accounts listed above are self directed by their nature according to the IRC.
How do I know if my retirement account is self directed?
Retirement accounts can be separated into 2 categories: Defined Contribution, and Defined Benefit. An example of a defined benefit retirement plan would be a pension plan