A Self Directed IRA Custodian? What on
Earth is That?

Getting laid off was bad enough, but then I had to get involved with what sounded like another language.

A self directed IRA custodian sounded more like something to do with a jailer for a motivated trustee in prison for activities in the Irish Republican Army than something to do with my retirement savings!

The woman in Human Resources tried to explain some stuff about "rolling over" - I think that's what she said - my company IRA, but my head was spinning.

There seemed to be an endless conveyor belt with company separation forms and I don't know what else.

My mind was far too occupied wondering where I might find another job.

What to ditch?

I was more interested in how I'd put food on the table after the separation pay ran out. What would we have to cut back on? What could we do without? Could I pick up something temporary until I found work? What could we sell if we needed to?

I wasn't concentrating of strange-sounding things like self-directed IRA custodians. I did understand the company would cut me a check if I chose that route, but they'd have to hold back 20% for taxes. The reason I remember that is that I considered it. A few thousand dollars would keep us going for a bit longer. It was tempting but not such a good idea in the long run.

With everything else that was going on, I asked if I could leave the money where it was for a little while. "Yes," the woman said, "but not for long." Then, she pressed, "How long do you think it will be?" I hadn't a clue but I knew she wanted an answer so I mumbled: "Just a few days, I guess."

As if there weren't enough things to be scared about! Now I had to be scared about what to do with this IRA money. I guess I'm like most Americans: I'm not much used to suddenly having to make money decisions like this. I don't remember that course in school. Why don't they teach that stuff in school instead of geography?

Facing the IRA problem

A few days later, after most of the initial panic had worn off, I faced up to my IRA problem. I did what I usually did when I'm looking for answers: fired up the computer and went online. Looking through a blur of listings, half of which made no sense to me or left me with more questions than I started with, I learned I could invest the money in almost anything:

  • stocks
  • bonds
  • mutual funds
  • Certificates of Deposit
  • real estate
  • and a whole lot of things I'd never heard of

What did I know about this stuff? I just wanted to keep the money safe.

One of the things I learned was that different self-directed IRA custodians charged different fees. Now fees were something I understand and, like taxes, don't like. I also knew I wasn't going to be an active investor so that ruled out full-service brokerage firms like Goldman Sachs.

'Free' hit the right note

Eventually, I stumbled across discount brokers such as E*Trade, TD Ameritrade and Scottrade. Stock purchases, if that's what I decide to do, cost between $7 and $10 and that sounded reasonable until I looked farther down the list and found Zecco.

Ten free trades a month are probably more than I'll make in a couple of years.

There's no minimum to open an IRA account, but there is one pesky fee.

They want $30 a year. Ah well! I s'pose they've got to make money somewhere.

I haven't yet decided how to invest the money.

I'll figure that out when it's been transferred. Meanwhile, it's back to the job hunt for me!

Return from Self Directed IRA Custodian to Self Directed IRA


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